Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2018shares | |
Document and Entity Information | |
Entity Registrant Name | ChinaCache International Holdings Ltd. |
Entity Central Index Key | 0001498576 |
Document Type | 20-F/A |
Document Registration Statement | false |
Document Annual Report | true |
Document Transition Report | false |
Document Fiscal Year Focus | 2018 |
Document Fiscal Period Focus | FY |
Document Period End Date | Dec. 31, 2018 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 429,404,977 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS $ in Thousands | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) |
Current assets: | |||
Cash and cash equivalents | $ 5,982 | ¥ 41,127,000 | ¥ 106,708,000 |
Restricted Cash | 794 | 5,461,000 | |
Accounts receivable (net of allowance for doubtful accounts of RMB81,301 and RMB82,366 (US$11,979) as of December 31, 2017 and 2018, respectively) | 30,612 | 210,476,000 | 161,043,000 |
Prepaid expenses and other current assets | 24,672 | 169,635,000 | 212,984,000 |
Amounts due from subsidiaries held for sale | 392 | 2,698,000 | 2,025,000 |
Assets held for sale | 84,554 | 581,350,000 | 581,731,000 |
Total current assets | 147,006 | 1,010,747,000 | 1,064,491,000 |
Non-current assets: | |||
Property and equipment, net | 60,369 | 415,067,000 | 53,326,000 |
Intangible assets, net | 21 | 143,000 | 165,000 |
Land use right, net | 4,679 | 32,172,000 | 32,902,000 |
Cloud infrastructure construction in progress | 42,074 | 289,280,000 | 416,352,000 |
Long term investments | 4,385 | 30,148,000 | 30,148,000 |
Long term deposits and other non-current assets | 9,935 | 68,312,000 | 8,651,000 |
Total non-current assets | 121,463 | 835,122,000 | 541,544,000 |
TOTAL ASSETS | 268,469 | 1,845,869,000 | 1,606,035,000 |
Current liabilities: | |||
Accounts payable (including accounts payable of the VIEs without recourse to the Company of RMB353,133 and RMB316,963 (US$46,100) as of December 31, 2017 and 2018, respectively) | 49,344 | 339,263,000 | 367,924,000 |
Accrued employee benefits (including accrued employee benefits of the VIEs without recourse to the Company of RMB32,783 and RMB24,898 (US$3,621) as of December 31, 2017 and 2018, respectively) | 5,352 | 36,794,000 | 44,465,000 |
Accrued expenses and other current liabilities (including accrued expenses and other payables of the VIEs without recourse to the Company of RMB29,728 and RMB38,915 (US$5,660) as of December 31, 2017 and 2018, respectively) | 6,927 | 47,634,000 | 39,282,000 |
Other payables (including accrued expenses and other payables of the VIEs without recourse to the Company of RMB15,547 and RMB15,072 (US$2,192) as of December 31, 2017 and 2018, respectively) | 204,184 | 1,403,854,000 | 1,254,375,000 |
Income tax payable (including income taxes payable of the VIEs without recourse to the Company of RMB6,268 and RMB3,212 (US$467) as of December 31, 2017 and 2018, respectively) | 12,366 | 85,025,000 | 78,337,000 |
Amounts due to related parties (including amounts due to related parties of the VIEs without recourse to the Company of nil and nil as of December 31, 2017 and 2018, respectively) | 10 | 69,000 | 18,000 |
Short-term borrowings (including short-term borrowings of the VIEs without recourse to the Company of RMB9,960 and nil as of December 31, 2017 and 2018, respectively) | 2,014 | 13,850,000 | 9,960,000 |
Current portion of capital lease obligations (including current portion of capital lease obligations of the VIEs without recourse to the Company of RMB42,735 and RMB1,284 (US$187) as of December 31, 2017 and 2018, respectively) | 2,952 | 20,299,000 | 42,735,000 |
Deferred government grant (including deferred government grant of the VIEs without recourse to the Company of RMB13,000 and RMB1,696 (US$247) as of December 31, 2017 and 2018, respectively) | 247 | 1,696,000 | 13,000,000 |
Amounts due to subsidiaries held for sale (including amount due to a subsidiary held for sale of the VIEs without recourse to the Company of RMB737 and RMB737 (US$107) as of December 31, 2017 and 2018, respectively) | 107 | 737,000 | 737,000 |
Liabilities held for sale (including liabilities held for sale of the VIEs without recourse to the Company of nil and nil as of December 31, 2017 and 2018, respectively) | 1,162 | 7,991,000 | 3,888,000 |
Total current liabilities | 293,152 | 2,015,567,000 | 1,887,363,000 |
Non-current liabilities: | |||
Long-term borrowings (including long-term borrowings of the VIEs without recourse to the Company of nil and nil as of December 31, 2017 and 2018, respectively) | 45,752 | 314,571,000 | 211,578,000 |
Non-current portion of capital lease obligations (including non-current portion of capital lease obligations of the VIEs without recourse to the Company of RMB1,421 and nil as of December 31, 2017 and 2018, respectively) | 6,015 | 41,359,000 | 1,421,000 |
Deferred government grant (including deferred government grant of the VIEs without recourse to the Company of RMB6,580 and RMB14,350 (US$2,087) as of December 31, 2017 and 2018, respectively) | 2,087 | 14,350,000 | 6,580,000 |
Total non-current liabilities | 53,854 | 370,280,000 | 219,579,000 |
Total liabilities | 347,006 | 2,385,847,000 | 2,106,942,000 |
Commitments and contingencies | |||
Shareholders' deficit: | |||
Ordinary shares (US$0.0001 par value; 1,000,000,000 and 1,000,000,000 shares authorized; 426,267,345 and 429,404,977 shares issued and outstanding as of December 31, 2017 and 2018, respectively) | 49 | 338,000 | 338,000 |
Additional paid-in capital | 229,678 | 1,579,153,000 | 1,573,341,000 |
Treasury stock | (2,623) | (18,033,000) | |
Statutory reserves | 193 | 1,326,000 | 1,326,000 |
Accumulated deficit | (305,515) | (2,100,569,000) | (2,076,151,000) |
Accumulated other comprehensive income | 221 | 1,522,000 | 2,559,000 |
Total ChinaCache International Holdings Ltd. shareholders' deficit | (77,997) | (536,263,000) | (498,587,000) |
Noncontrolling interest | (540) | (3,715,000) | (2,320,000) |
Total shareholder's deficit | (78,537) | (539,978,000) | (500,907,000) |
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT | $ 268,469 | ¥ 1,845,869,000 | ¥ 1,606,035,000 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) ¥ in Thousands, $ in Thousands | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2018CNY (¥)shares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2017CNY (¥)shares | Dec. 31, 2016CNY (¥) |
Short-term loan of the VIEs without recourse to the Company | $ 2,014 | ¥ 13,850 | ¥ 9,960 | ||
Accounts receivable, allowance for doubtful accounts (in CNY and dollars) | 11,979 | 82,366 | $ 11,824 | 81,301 | ¥ 63,921 |
Accounts payable of the VIEs without recourse to the Company | 49,344 | 339,263 | 367,924 | ||
Accrued employee benefits of the VIEs without recourse to the Company | 5,352 | 36,794 | 44,465 | ||
Other payables of the VIEs without recourse to the Company | 204,184 | 1,403,854 | 1,254,375 | ||
Amounts due to related parties of the VIEs without recourse to the Company | 10 | 69 | 18 | ||
Accrued expenses and other payables of the VIEs without recourse to the Company | 6,927 | 47,634 | 39,282 | ||
Income taxes payable of the VIEs without recourse to the Company | 12,366 | 85,025 | 78,337 | ||
Liabilities held for sale of the VIEs without recourse to the Company | 1,162 | 7,991 | 3,888 | ||
Long term borrowings of the VIEs without recourse to the Company | 45,752 | 314,571 | 211,578 | ||
Current portion of capital lease obligations of the VIEs without recourse to the Company | 2,952 | 20,299 | 42,735 | ||
Deferred government grant (including deferred government grant of the VIEs without recourse to the Company of RMB13,000 and RMB13,000 (US$1,891) as of December 31, 2017 and 2018, respectively) | 247 | 1,696 | 13,000 | ||
Amount due to a subsidiary held for sale of the VIEs without recourse to the Company | 107 | 737 | 737 | ||
Non-current portion of capital lease obligations of the VIEs without recourse to the Company | 6,015 | 41,359 | 1,421 | ||
Deferred government grant of the VIEs without recourse to the Company, non-current | $ 2,087 | ¥ 14,350 | ¥ 6,580 | ||
Ordinary shares, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | |||
Ordinary shares, shares authorized (in shares) | shares | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | |
Ordinary shares, shares issued (in shares) | shares | 429,404,977 | 429,404,977 | 426,267,345 | 426,267,345 | |
Ordinary shares, shares outstanding (in shares) | shares | 429,404,977 | 429,404,977 | 426,267,345 | 426,267,345 | |
Consolidated Variable Interest Entity (VIEs) | |||||
Short-term loan of the VIEs without recourse to the Company | ¥ 0 | ¥ 9,960 | |||
Accounts receivable, allowance for doubtful accounts (in CNY and dollars) | $ 11,706 | 80,484 | 80,612 | ||
Accounts payable of the VIEs without recourse to the Company | 46,100 | 316,963 | 353,133 | ||
Accrued employee benefits of the VIEs without recourse to the Company | 3,621 | 24,898 | 32,783 | ||
Other payables of the VIEs without recourse to the Company | 2,192 | 15,072 | 15,547 | ||
Amounts due to related parties of the VIEs without recourse to the Company | 0 | 0 | |||
Accrued expenses and other payables of the VIEs without recourse to the Company | 5,660 | 38,915 | 29,728 | ||
Income taxes payable of the VIEs without recourse to the Company | 1,599 | 10,991 | 10,455 | ||
Liabilities held for sale of the VIEs without recourse to the Company | 0 | 0 | |||
Long term borrowings of the VIEs without recourse to the Company | 0 | 0 | |||
Less: current portion | 0 | 0 | |||
Current portion of capital lease obligations of the VIEs without recourse to the Company | 187 | 1,284 | 42,735 | ||
Deferred government grant (including deferred government grant of the VIEs without recourse to the Company of RMB13,000 and RMB13,000 (US$1,891) as of December 31, 2017 and 2018, respectively) | 247 | 1,696 | 13,000 | ||
Amount due to a subsidiary held for sale of the VIEs without recourse to the Company | 107 | 737 | 737 | ||
Non-current portion of capital lease obligations of the VIEs without recourse to the Company | 0 | 0 | ¥ 1,421 | ||
Deferred government grant of the VIEs without recourse to the Company, non-current | $ 2,087 | ¥ 14,350 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2018CNY (¥)¥ / sharesshares | Dec. 31, 2017CNY (¥)¥ / sharesshares | Dec. 31, 2016CNY (¥)¥ / sharesshares | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||||
Net revenues | $ 134,185 | ¥ 922,591,000 | ¥ 852,568,000 | ¥ 1,054,235,000 |
Cost of revenues | (96,889) | (666,162,000) | (781,822,000) | (1,077,810,000) |
Gross (loss) /profit | 37,296 | 256,429,000 | 70,746,000 | (23,575,000) |
Other operating loss | (3,978) | (27,352,000) | (19,483,000) | (19,044,000) |
Sales and marketing expenses | (5,298) | (36,428,000) | (61,770,000) | (93,603,000) |
General and administrative expenses | (18,665) | (128,331,000) | (142,721,000) | (256,007,000) |
Provision for doubtful accounts receivable | (153) | (1,050,000) | (17,514,000) | (9,010,000) |
Research and development expenses | (9,950) | (68,412,000) | (81,748,000) | (104,018,000) |
Impairment of long-lived assets | (21,757,000) | (399,094,000) | ||
Impairment of long-term investments (net the of portion of loss recognized in other comprehensive loss of nil, RMB3,290 and nil during the years ended December 31, 2016, 2017 and 2018) | 0 | |||
Operating loss | (748) | (5,144,000) | (277,937,000) | (922,591,000) |
Interest income | 52 | 354,000 | 1,430,000 | 4,669,000 |
Interest expense | (4,879) | (33,543,000) | (18,665,000) | (11,647,000) |
Other income/(loss) | 1,212 | 8,331,000 | (5,303,000) | 5,336,000 |
Foreign exchange gain/(loss) | 611 | 4,200,000 | (11,043,000) | 14,209,000 |
Loss before income taxes | (3,752) | (25,802,000) | (311,518,000) | (910,024,000) |
Income tax expense | (2) | (11,000) | (59,648,000) | (4,229,000) |
Net loss | (3,754) | (25,813,000) | (371,166,000) | (914,253,000) |
Less: net loss attributable to noncontrolling interest | (203) | (1,395,000) | (2,005,000) | (776,000) |
Net loss attributable to the Company's shareholders | $ (3,551) | ¥ (24,418,000) | ¥ (369,161,000) | ¥ (913,477,000) |
Loss per share | ||||
Basic and Diluted (in CNY or dollars per share) | (per share) | $ (0.01) | ¥ (0.06) | ¥ (0.87) | ¥ (2.24) |
Shares used in loss per share computations: | ||||
Basic and Diluted | shares | 426,809,567 | 426,809,567 | 425,589,746 | 408,189,722 |
Foreign currency translation | $ (151) | ¥ (1,037,000) | ¥ 2,748,000 | ¥ (293,000) |
Unrealized holding gain(loss) on available-for-sale investments | (4,195,000) | 659,000 | ||
Amounts reclassified from accumulated other comprehensive income | 3,290,000 | (3,552,000) | ||
Total other comprehensive (loss)/income, net of tax | (151) | (1,037,000) | 1,843,000 | (3,186,000) |
Comprehensive loss | (3,905) | (26,850,000) | (369,323,000) | (917,439,000) |
Less: comprehensive loss attributable to noncontrolling interest | (203) | (1,395,000) | (2,005,000) | (776,000) |
Comprehensive loss attributable to the Company's shareholders | $ (3,702) | ¥ (25,455,000) | ¥ (367,318,000) | ¥ (916,663,000) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | |
Cash flows from operating activities: | ||||
Net loss | $ (3,754) | ¥ (25,813,000) | ¥ (371,166,000) | ¥ (914,253,000) |
Depreciation of property and equipment | 12,017,000 | 9,145,000 | 155,225,000 | |
Amortization of intangible assets and land use right | 115 | 791,000 | 2,371,000 | 3,869,000 |
Allowance for doubtful accounts | 153 | 1,050,000 | 17,514,000 | 9,010,000 |
Impairment of long-lived assets | 21,757,000 | 399,094,000 | ||
Impairment of long-term investments | 0 | |||
Loss/(gain) from disposal of property and equipment | 219 | 1,509,000 | (559,000) | 2,028,000 |
Deferred tax expense | 30,220,000 | 3,125,000 | ||
Interest expense adjustment | 686 | 4,718,000 | 4,289,000 | 1,380,000 |
Foreign exchange (gain)/loss | (611) | (4,200,000) | 11,018,000 | (14,151,000) |
Gain from sale of short-term investments | (3,552,000) | |||
Share-based compensation | 605 | 4,157,000 | 10,936,000 | 85,025,000 |
Amortization of other non-current asset | 2,213 | 15,217,000 | ||
Amortization of deferred goverment grant | (514) | (3,535,000) | (4,627,000) | (12,041,000) |
Changes in operating assets and liabilities: | ||||
Accounts receivable | (7,345) | (50,498,000) | 14,025,000 | 41,840,000 |
Prepaid expense and other current assets | (1,923) | (13,223,000) | (26,547,000) | (1,095,000) |
Long term deposits and other non-current assets | 2,096 | 14,413,000 | 58,274,000 | (1,221,000) |
Accounts payable | (4,169) | (28,661,000) | 60,938,000 | 101,392,000 |
Accrued employee benefits | (1,116) | (7,671,000) | (2,046,000) | 1,085,000 |
Accrued expenses and other payables | 4,558 | 31,331,000 | 61,443,000 | (73,174,000) |
Income tax payable | 973 | 6,688,000 | 286,000 | (456,000) |
Amounts due to related parties | 7 | 51,000 | ||
Deferred government grant | (11,450,000) | |||
Net cash used in operating activities | (6,059) | (41,659,000) | (99,039,000) | (187,180,000) |
Cash flows from investing activities: | ||||
Purchases of property and equipment and intangible assets | (6) | (39,000) | (15,236,000) | (59,234,000) |
Cash paid for long term investment (Note 12) | (362,000) | (2,242,000) | ||
Cash receipts from sales of short-term investments | 80,380,000 | |||
Cash paid for cloud infrastructure construction in progress (Note 11) | (23,427) | (161,072,000) | (73,697,000) | (222,292,000) |
Proceeds from disposal of property and equipment | 44 | 300,000 | 998,000 | |
Net cash used in investing activities | (23,389) | (160,811,000) | (89,295,000) | (202,390,000) |
Cash flows from financing activities: | ||||
Proceeds from bank borrowings (Note 13) | 29,591 | 203,450,000 | 411,745,000 | 29,311,000 |
Borrowing cost | (1,105) | (7,599,000) | (4,900,000) | |
Repayment of bank borrowings | (10,584) | (72,771,000) | (183,151,000) | (7,680,000) |
Proceeds from employee share options exercised | 7,579,000 | |||
Payments of capital lease obligations | (6,761) | (46,484,000) | (74,687,000) | (74,453,000) |
Proceeds from sales and lease back | 9,308 | 64,000,000 | ||
Payments for repurchases of ordinary shares | (39,402,000) | |||
Net cash (used in) / provided by financing activities | 20,449 | 140,596,000 | 149,007,000 | (84,645,000) |
Net decrease in cash and cash equivalents | (8,999) | (61,874,000) | (39,327,000) | (474,215,000) |
Cash and cash equivalents at beginning of the year | 15,520 | 106,709,000 | 156,620,000 | 616,218,000 |
Effect of foreign exchange rate changes on cash | 255 | 1,754,000 | (10,584,000) | 14,617,000 |
Cash and cash equivalents at end of the year | 6,776 | 46,589,000 | 106,709,000 | 156,620,000 |
Supplemental disclosures of cash flow information: | ||||
Interest paid | (16,416,000) | (10,267,000) | ||
Interest received | 52 | 354,000 | 1,430,000 | 4,669,000 |
Supplemental disclosures of non-cash activities: | ||||
Acquisition of property and equipment included in accrued expenses and other payables | (57,201) | (393,287,000) | (257,375,000) | (16,397,000) |
Acquisition of property and equipment through capital leases | ¥ 65,824,000 | ¥ 59,234,000 | ||
Share settlement of individual income tax on exercise of options | $ 2,623 | ¥ 18,035,000 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY $ in Thousands | Ordinary sharesUSD ($)shares | Ordinary sharesCNY (¥)shares | Additional paid-in capitalUSD ($) | Additional paid-in capitalCNY (¥) | Treasury StockUSD ($) | Treasury StockCNY (¥) | Statutory reservesUSD ($) | Statutory reservesCNY (¥) | Accumulated deficitUSD ($) | Accumulated deficitCNY (¥) | Accumulated other comprehensive incomeUSD ($) | Accumulated other comprehensive incomeCNY (¥) | Noncontrolling interestsUSD ($) | Noncontrolling interestsCNY (¥) | USD ($)shares | CNY (¥)shares |
Balance at beginning of year at Dec. 31, 2015 | ¥ 310,000 | ¥ 1,473,468,000 | ¥ (94,275,000) | ¥ 1,326,000 | ¥ (663,506,000) | ¥ 3,902,000 | ¥ 461,000 | ¥ 721,686,000 | ||||||||
Balance at beginning of year (in shares) at Dec. 31, 2015 | shares | 400,069,875 | 400,069,875 | ||||||||||||||
Net loss | (913,477,000) | (776,000) | (914,253,000) | |||||||||||||
Other comprehensive loss | ||||||||||||||||
Foreign currency translation adjustment | (293,000) | (293,000) | ||||||||||||||
Unrealized holding gain on available-for-sale investment | 659,000 | 659,000 | ||||||||||||||
Amounts reclassified from accumulated other comprehensive income | (3,552,000) | (3,552,000) | ||||||||||||||
Share-based compensation | 85,025,000 | 85,025,000 | ||||||||||||||
Repurchase of shares | (39,402,000) | (39,402,000) | ||||||||||||||
Repurchase of shares (in shares) | shares | (13,730,656) | (13,730,656) | ||||||||||||||
Exercise of employee stock options | ¥ 1,000 | 3,938,000 | 4,122,000 | (452,000) | ¥ 7,609,000 | |||||||||||
Exercise of employee stock options (in shares) | shares | 1,325,241 | 1,325,241 | 1,325,241 | 1,325,241 | ||||||||||||
Restricted shares vested | ¥ 23,000 | (23,000) | 105,024,000 | (105,024,000) | ||||||||||||
Restricted shares vested (in shares) | shares | 33,762,181 | 33,762,181 | 33,762,181 | 33,762,181 | ||||||||||||
Shares issued to depository bank (in shares) | shares | 23,000,000 | 23,000,000 | ||||||||||||||
Settlement of share options exercised with shares held by depository bank (in shares) | shares | (35,087,422) | (35,087,422) | ||||||||||||||
Balance at end of year at Dec. 31, 2016 | ¥ 334,000 | 1,562,408,000 | (24,531,000) | 1,326,000 | (1,682,459,000) | 716,000 | (315,000) | ¥ (142,521,000) | ||||||||
Balance at end of year (in shares) at Dec. 31, 2016 | shares | 409,339,219 | 409,339,219 | ||||||||||||||
Net loss | (369,161,000) | (2,005,000) | (371,166,000) | |||||||||||||
Other comprehensive loss | ||||||||||||||||
Foreign currency translation adjustment | 2,748,000 | 2,748,000 | ||||||||||||||
Unrealized holding gain on available-for-sale investment | (4,195,000) | (4,195,000) | ||||||||||||||
Amounts reclassified from accumulated other comprehensive income | 3,290,000 | 3,290,000 | ||||||||||||||
Share-based compensation | 10,937,000 | 10,937,000 | ||||||||||||||
Repurchase of shares | ¥ 0 | |||||||||||||||
Restricted shares vested | ¥ 4,000 | (4,000) | 24,531,000 | (24,531,000) | ||||||||||||
Restricted shares vested (in shares) | shares | 20,555,835 | 20,555,835 | 3,627,709 | 3,627,709 | ||||||||||||
Settlement of share options exercised with shares held by depository bank (in shares) | shares | (3,627,709) | (3,627,709) | ||||||||||||||
Balance at end of year at Dec. 31, 2017 | ¥ 338,000 | 1,573,341,000 | 1,326,000 | (2,076,151,000) | 2,559,000 | (2,320,000) | ¥ (500,907,000) | |||||||||
Balance at end of year (in shares) at Dec. 31, 2017 | shares | 426,267,345 | 426,267,345 | ||||||||||||||
Net loss | (24,418,000) | (1,395,000) | $ (3,754) | (25,813,000) | ||||||||||||
Other comprehensive loss | ||||||||||||||||
Foreign currency translation adjustment | (1,037,000) | (151) | (1,037,000) | |||||||||||||
Amounts reclassified from accumulated other comprehensive income | 0 | |||||||||||||||
Share-based compensation | 4,157,000 | 4,157,000 | ||||||||||||||
Repurchase of shares | 0 | |||||||||||||||
Share Settlement Of Individual Income Tax On Exercise Of Options | (18,035,000) | $ (2,623) | (18,035,000) | |||||||||||||
Exercise of employee stock options | 1,656,000 | 1,000 | ¥ 1,657,000 | |||||||||||||
Exercise of employee stock options (in shares) | shares | 1,096,896 | 1,096,896 | 1,096,896 | 1,096,896 | ||||||||||||
Restricted shares vested | (1,000) | 1,000 | ||||||||||||||
Restricted shares vested (in shares) | shares | 2,040,736 | 2,040,736 | 2,040,736 | 2,040,736 | ||||||||||||
Balance at end of year at Dec. 31, 2018 | $ 49 | ¥ 338,000 | $ 229,678 | ¥ 1,579,153,000 | $ (2,623) | ¥ (18,033,000) | $ 193 | ¥ 1,326,000 | $ (305,515) | ¥ (2,100,569,000) | $ 221 | ¥ 1,522,000 | $ (540) | ¥ (3,715,000) | $ (78,537) | ¥ (539,978,000) |
Balance at end of year (in shares) at Dec. 31, 2018 | shares | 429,404,977 | 429,404,977 |
ORGANIZATION
ORGANIZATION | 12 Months Ended |
Dec. 31, 2018 | |
ORGANIZATION | |
ORGANIZATION | 1. ORGANIZATION ChinaCache International Holdings Ltd. (the ‘‘Company’’) was incorporated under the laws of the Cayman Islands on June 29, 2005 and its principal activity is investment holding. The founders of the Company are Mr. Wang Song and his spouse Kou Xiaohong (the “Founders”). The Company through its subsidiaries and variable interest entities (collectively "the Group") noted below are principally engaged in the provision of content and application delivery total solutions in the People’s Republic of China (the “PRC”). As of December 31, 2018, subsidiaries of the Company and variable interest entities (“VIEs”) where the Company is the primary beneficiary include the following: Date of Place of Percentage of incorporation incorporation ownership Principal activities Subsidiaries ChinaCache Network Technology (Beijing) Ltd. (“ChinaCache Beijing”) August 25, 2005 The PRC 100 % Provision of technical consultation services ChinaCache North America Inc. (“ChinaCache US”) August 16, 2007 United States of America 100 % Provision of content and application delivery services JNet Holdings Limited (“JNet Holdings”) September 27, 2007 British Virgin Islands 100 % Investment holding ChinaCache Networks Hong Kong Ltd. (“ChinaCache HK”) April 7, 2008 Hong Kong 100 % Provision of content and application delivery services ChinaCache Xin Run Technology (Beijing) Co., Ltd. (“Xin Run”) July 18, 2011 The PRC 99 %** Construction of cloud infrastructure Metasequoia Investment Inc. (“Metasequoia”) March 28, 2012 British Virgin Islands 100 % Investment holding ChinaCache Ireland Limited (“ChinaCache IE”) **** November 18, 2013 Ireland 100 % Provision of content and application delivery services Beijing Shou Ming Technology Co., Ltd. (“Beijing Shou Ming”) August 15, 2014 The PRC 99 %** Computer hardware, technology development Beijing Shuo Ge Technology Co., Ltd. (“Beijing Shuo Ge”) **** August 15, 2014 The PRC 99 %** Mechanical equipment lease Beijing Zhao Du Technology Co., Ltd. (“Beijing Zhao Du”) *** August 15, 2014 The PRC 99 %** Mechanical equipment lease ChinaCache Networks (UK) Limited (“ChinaCache UK”) March 10, 2016 England and Wales % Provision of content and application delivery services ChinaCache Assets LLC (“CCAL”) August 10, 2016 United States of America % Real estate management VIEs Beijing Blue I.T. Technologies Co., Ltd. (“Beijing Blue IT”) * June 7, 1998 The PRC — Provision of content and application delivery services Beijing Jingtian Technology Limited (“Beijing Jingtian”) * September 1, 2005 The PRC — Provision of content and application delivery services ChinaCache Shouming Technology (Beijing) Co., Ltd. ("ChinaCache Shouming") * June 6, 2018 The PRC — Technology Development * ** *** ****Subsequently in February 2019, ChinaCache IE, which has no material operation, was deregistered. In May 2019, Xin Run transferred its 100% equity interests in Beijing Shuo Ge to a buyer (Note 27). Through the Company's subsidiaries in the PRC, the Company signed a series of contracts with certain VIEs, specifically Beijing Blue IT in September 2005, Beijing Jingtian in July 2008, and ChinaCache Shouming September 2018. The following is a summary of the various VIE agreements: Exclusive option agreements Pursuant to the exclusive option agreement amongst the Company and the Nominee Shareholders of Beijing Blue IT in September 2005, the Nominee Shareholders of Beijing Blue IT irrevocably granted the Company or its designated party, an exclusive option to purchase all or part of the equity interests held by the Nominee Shareholders in Beijing Blue IT, when and to the extent permitted under PRC law, at an amount equal to either a) the outstanding loan amount pursuant to the loan agreement owed by the Nominee Shareholders or b) the lowest permissible purchase price as set by PRC law. Such consideration, if in excess of the outstanding loan amount, when received by the Nominee Shareholders upon the exercise of the exclusive option is required to be remitted in full to the Company. Beijing Blue IT cannot declare any profit distributions or grant loans in any form without the prior written consent of the Company. The Nominee Shareholders of Beijing Blue IT must remit in full any funds received from Beijing Blue IT to the Company, in the event any distributions are made by the Beijing Blue IT pursuant to any written consents of the Company. Similar exclusive option agreements were signed by ChinaCache Beijing with Beijing Jingtian in July 2008, and by Xin Run with ChinaCache Shouming in September 2018. All the afore-mentioned exclusive option agreements were valid for ten years, and can be renewed for an additional ten years at the sole discretion of the Company/ ChinaCache Beijing /Xin Run, and the times of such renewals are unlimited. The agreement amongst the Company and the Nominee Shareholders of Beijing Blue IT has been renewed and will expire on January 20, 2026. The agreement amongst the ChinaCache and the Nominee Shareholders of Beijing Jingtian has been renewed and will expire on January 15,2029. The agreement amongst the Xin Run and the Nominee Shareholders of ChinaCache Shouming will be expired on August 20, 2028. Exclusive business cooperation agreements Pursuant to the exclusive business cooperation agreement between ChinaCache Beijing/Xin Run and the VIEs, ChinaCache Beijing/Xin Run is to provide exclusive business support, technical and consulting services including technical services, business consultations, access to intellectual property licenses, equipment or property leasing, marketing consultancy, system integration, product research and development and system maintenance in return for fees in an amount as determined and adjustable at the sole discretion of ChinaCache Beijing/Xin Run. The service fees charged to Beijing Blue IT are based on methods set forth in the technical support and service agreement and technical consultation and training agreement, as further discussed below, see “Exclusive technical support and service agreement/Exclusive technical consultation and training agreement/Equipment leasing agreement”. The service fees charged to Beijing Jingtian/ ChinaCache Shouming is based on 100% of their net income respectively. All the Exclusive business cooperation agreements were valid for ten years, and ChinaCache Beijing/Xin Run can at its sole discretion renew at a term of its choice through written confirmation. The agreement between ChinaCache Beijing and Beijing Blue IT has been renewed and will expire on September 23, 2025. The agreement amongst the ChinaCache and the Nominee Shareholders of Beijing Jingtian has been renewed and will expire on January 15, 2029. The agreement between Xin Run and ChinaCache Shouming was signed in September 2018, and will be expired on August 20, 2028. Exclusive technical support and service agreement/Exclusive technical consultation and training agreement/Equipment leasing agreement Pursuant to these agreements between ChinaCache Beijing and Beijing Blue IT, ChinaCache Beijing is to provide research and development, technical support, consulting, training and equipment leasing services in return for fees, which is adjustable at the sole discretion of ChinaCache Beijing. The fees charged to Blue IT include an annual fixed amount and a variable quarterly amount which is determined based on the following factors: the number of ChinaCache Beijing’s employees who provided the services pursuant to the business cooperation agreement to Beijing Blue IT during the quarter (the “Quarterly Services”) and the qualifications of the employees; the number of hours ChinaCache Beijing’s employees spent to provide the Quarterly Services; operating expenses incurred by ChinaCache Beijing to provide the Quarterly Services; nature and value of the Quarterly Services; and Beijing Blue IT’s operating revenue for the quarter. The original term of each of these three agreements was five years running from September 23, 2005, and each of the agreements was renewed in September 2010 for a five-year term which expired on September 23, 2015. In September 2015, each of such agreements was renewed for an additional five years to September 23, 2020. The term of the equipment leasing agreement can be extended solely by ChinaCache Beijing by written notice prior to the expiration of the term, and the extended term shall be determined by ChinaCache Beijing. The exclusive business cooperation agreement, exclusive technical support and service agreement, exclusive technical consultation and training agreement, and equipment leasing agreement are collectively referred to as “Service Agreements”. Loan agreements The Company provided a loan facility of RMB10,000,000 to the Nominee Shareholders of Beijing Blue IT for the purpose of providing capital to Beijing Blue IT to develop its business. In addition, the Company also agreed to provide unlimited financial support to Beijing Blue IT for its operations and agree to forego the right to seek repayment in the event Beijing Blue IT is unable to repay such funding. The loan agreement between the Company and the Nominee Shareholders of Beijing Blue IT was valid for ten years and expired on September 23, 2015. Such agreement was renewed for an additional ten years to September 23, 2025. Such agreement can be extended for another ten years upon mutual written consent of the Company and the Nominee Shareholders of Beijing Blue IT. On January 20, 2016, the Nominee Shareholders of Beijing Blue IT entered into another loan agreement with the Company. Pursuant to this agreement, the Company provided an interest-free loan facility of RMB10,000,000 to the Nominee Shareholders of Beijing Blue IT for the purpose of subscribing for the capital increase of Beijing Blue IT. The term of the loan agreement is ten years and expires on January 20, 2026. The term of the loan agreement may be extended upon mutual written consent of the parties. On December 19, 2016, the Nominee Shareholders of Beijing Blue IT entered into another loan agreement with the Company. Pursuant to this agreement, the Company provided an interest-free loan facility of RMB20,000,000 to the Nominee Shareholders of Beijing Blue IT for the purpose of purchasing the increased capital of Beijing Blue IT. The term of the loan agreement is ten years and expires on December 19, 2026. The term of the loan agreement may be extended upon mutual written consent of the parties. ChinaCache Beijing also provided a loan of RMB8,500,000 to the Nominee Shareholders of Beijing Jingtian for their investment in the registered share capital. In addition, the Company, through ChinaCache Beijing, agreed to provide unlimited financial support to Beijing Jingtian for their operations and agree to forego the right to seek repayment in the event this VIE are unable to repay such funding. The loan agreement between ChinaCache Beijing and the Nominee Shareholders of Beijing Jingtian is valid for ten years and expires on December 3, 2022. Such agreement can be extended upon mutual written consent of ChinaCache Beijing and the Nominee Shareholders of Beijing Jingtian. Xin Run also provided a loan of RMB10,000,000 to the Nominee Shareholders of ChinaCache Shouming for their investment in the registered share capital. In addition, the Company, through Xin Run, agreed to provide unlimited financial support to ChinaCache Shouming for their operations and agree to forego the right to seek repayment in the event this VIE are unable to repay such funding. The loan agreement between Xin Run and the Nominee Shareholders of ChinaCache Shouming is valid for ten years and will expire on August 20, 2028. Such agreement can be extended upon mutual written consent of Xin Run and the Nominee Shareholders of ChinaCache Shouming. Power of attorney agreements The Nominee Shareholders entered into the power of attorney agreement whereby they granted an irrevocable proxy of the voting rights underlying their respective equity interests in the VIEs to ChinaCache Beijing/Xin Run, which includes, but are not limited to, all the shareholders’ rights and voting rights empowered to the Nominee Shareholders by the company law and the Company’s Article of Association. This agreement remains continuously valid, as long as the Nominee Shareholders continue to be the shareholders of the VIEs. Subsequently, ChinaCache Beijing/Xin Run assigned the power of attorney agreement to ChinaCache Beijing/Xin Run’s shareholders or a party designated by ChinaCache Beijing and Xin Run’s shareholders, to whom it granted an irrevocable proxy of the voting rights underlying their respective equity interests in the VIEs, which includes, but are not limited to, all the shareholders’ rights and voting rights empowered to the Nominee Shareholders by the company law and the Company’s Article of Association. Share pledge agreements Pursuant to the share pledge agreement between ChinaCache Beijing/Xin Run, and the Nominee Shareholders of VIEs, the Nominee Shareholders have pledged all their equity interests in the VIEs to guarantee the performance of the VIEs’ obligations under the Service Agreements. If the VIEs breach their respective contractual obligations under the business cooperation agreements, ChinaCache Beijing and/or Xin Run, as pledgee, will be entitled to certain rights, including the right to sell the pledged equity interests. The Nominee Shareholders of VIEs agreed not to transfer, sell, pledge, dispose of or otherwise create any new encumbrance on their equity interests in the VIEs without the prior written consent of ChinaCache Beijing/Xin Run. This agreement is continuously valid until all payments due under the above VIE agreements have been fulfilled by the VIEs. Despite the lack of technical majority ownership, there exists a parent-subsidiary relationship between the Company and the VIEs through the irrevocable power of attorney agreements, whereby the Nominee Shareholders effectively assigned all of their voting rights underlying their equity interest in the VIEs to the Company. In addition, the Company, either directly or through ChinaCache Beijing and/or Xin Run, obtained effective control over the VIEs through the ability to exercise all the rights of the VIEs’ shareholders pursuant to the share pledge agreements and the exclusive option agreements. The Company demonstrates its ability and intention to continue to exercise the ability to absorb substantially all of the expected losses directly through the loan agreements. In addition, the Company also demonstrates its ability to receive substantially all of the economic benefits of the VIEs through ChinaCache Beijing and/or Xin Run using the Service Agreements. Thus, the Company is the primary beneficiary of the VIEs and consolidates the VIEs under by Accounting Standards Codification (“ASC”) Subtopic 810-10 (“ASC 810-10”) “Consolidation: Overall”. Legal compliance Assessing the legal validity and compliance of these above noted arrangements are a precursor to the Company’s ability to consolidate the results of operations and financial condition of its VIEs. In the opinion of the Company’s management and PRC counsel, (i) the ownership structure of the VIEs are in compliance with existing PRC laws and regulations; (ii) each of the currently effective documents under the contractual arrangements among the Company, the Group's PRC subsidiary, PRC consolidated variable interest entities and their shareholders governed by PRC law are valid, binding and enforceable, and will not result in any violation of PRC laws or regulations currently in effect; and (iii) the Company’s business operations are in compliance with existing PRC laws and regulations in all material respects. However, there is significant consolidation judgment due to the existence of substantial uncertainties regarding the interpretation and application of current and future PRC laws and regulations. Accordingly, the Company cannot be assured that PRC regulatory authorities will not ultimately take a contrary view to its opinion. If the current ownership structure of the Company and its contractual arrangements with its VIEs is found to be in violation of any existing or future PRC laws and regulations, the Company may be required to restructure its ownership structure and operations in the PRC. To the extent that changes to and new PRC laws and regulations prohibit the Company’s VIE arrangements from also complying with the principles of consolidation, then the Company would no longer be able to consolidate and therefore would have to deconsolidate the financial position and results of operations of its VIEs. In the opinion of management, the likelihood of loss and deconsolidation in respect of the Company’s current ownership structure or the contractual arrangements with its VIEs is remote based on current facts and circumstances. There was no pledge or collateralization of the VIEs’ assets. Creditors of the VIEs have no recourse to the general credit of the Company, who is the primary beneficiary of the VIEs, and such amounts have been parenthetically presented on the face of the consolidated balance sheets. The Consolidated VIEs operate the data centers and own facilities including data center buildings, leasehold improvements, fiber optic cables, computers and network equipment, which are recognized in the Company’s consolidated financial statements. They also hold certain value-added technology licenses, registered copyrights, trademarks and registered domain names, including the official website, which are also considered as revenue-producing assets. However, none of such assets were recorded on the Company’s consolidated balance sheets as such assets were all acquired or internally developed with insignificant cost and expensed as incurred. In addition, the Company also hires data center operation and marketing workforce for its daily operations and such costs are expensed when incurred. The Company has not provided any financial or other support that it was not previously contractually required to provide to the VIEs during the periods presented. Unrecognized revenue-producing assets held by the VIEs mainly include licenses, such as the Internet Content Provision License, the Value-Added Telecommunication Services Operating License, the Online Culture Operating Permit, and trademarks, patents, copy rights and the domain names. However, none of such assets was recorded on the Company’s consolidated balance sheets as such assets were all acquired or internally developed with insignificant cost and expensed as incurred. Recognized revenue-producing assets held by the VIEs include core technology, trademarks and domain names. Unrecognized revenue-producing assets, including customer lists for provision of content and application delivery total solutions, as well as trademarks, are held by ChinaCache Beijing and/or Xin Run. The following tables represent the financial information of the consolidated VIEs as of December 31, 2017 and 2018 and for the years ended December 31, 2016, 2017 and 2018 before eliminating the intercompany balances and transactions between the VIEs and other entities within the Group: As of December 31, 2017 2018 RMB RMB US$ ASSETS: Current assets: Cash and cash equivalents 27,113 14,557 2,117 Restricted cash — 3,169 461 Accounts receivable (net of allowance for doubtful accounts of RMB80,612 and RMB80,484 (US$11,706) as of December 31, 2017 and 2018, respectively) 76,359 72,844 10,595 Prepaid expenses and other current assets 45,007 12,711 1,849 Amounts due from inter-companies (1) 185,801 9,572 1,392 Total current assets 334,280 112,853 16,414 Non-current assets: Property and equipment, net — 2,291 333 Intangible assets, net — 35 5 Long term investments 10,103 10,103 1,469 Long term deposits and other non-current assets 7,345 4,711 686 Total non-current assets 17,448 17,140 2,493 TOTAL ASSETS 351,728 129,993 18,907 As of December 31, 2017 2018 RMB RMB US$ LIABILITIES: Current liabilities: Short-term borrowings 9,960 — — Accounts payable 353,133 316,963 46,100 Accrued employee benefits 32,783 24,898 3,621 Accrued expenses and other current liabilities 29,728 38,915 5,660 Other payables 15,547 15,072 2,192 Income tax payable 10,455 10,991 1,599 Amounts due to inter-companies (1) 499,375 263,551 38,332 Amounts due to subsidiaries held for sale (2) 737 737 107 Current portion of capital lease obligations 42,735 1,284 187 Deferred government grant 13,000 1,696 247 Total current liabilities 1,007,453 674,107 98,045 Non-current liabilities: Non-current portion of capital lease obligations 1,421 — — Deferred government grant 6,581 14,350 2,087 Total non-current liabilities 8,002 14,350 2,087 Total liabilities 1,015,455 688,457 100,132 (1) Amount due from/to inter-companies consist of intercompany receivables/payables to the other companies within the Group. (2) Information with respect to subsidiaries held for sale is discussed in Note 10. For the Years Ended December 31, 2016 2017 2018 RMB’000 RMB’000 RMB’000 US$’000 Net revenues -Third party customers 658,475 479,012 344,108 50,048 -Inter-companies 321,161 342,035 499,017 72,579 Net (loss)/profit (627,544) (88,547) 105,324 15,319 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2018 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Basis of presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S GAAP”). (b) Going concern The Group experienced net loss of approximately RMB914,253,000, RMB371,166,000 and RMB25,813,000 (US$ 3,754,000) for the years ended December 31, 2016, 2017 and 2018, respectively, negative cash flows from operations of approximately RMB99,039,000 and RMB41,659,000(US$ 6,059,000) for the years ended December 31, 2017 and 2018, respectively. As of December 31, 2018, the Group had net current liabilities of approximately RMB1,004,820,000 (US$ 146,146,000). These conditions raised substantial doubt about the Group's ability to continue as a going concern. When preparing the consolidated financial statements as of December 31, 2018 and for the year then ended, the Group 's management concluded that a going concern basis of preparation was appropriate after analyzing the cash flow forecast for the next twelve months through November 2020. In preparing the cash flow analysis, management took into account of a) the advance of RMB80,000,000 (US$11,636,000) to be received from a third party buyer for selling certain cloud infrastructure buildings under construction and later another RMB1,150,000,000 (US$167,261,000) could be received for the completeness of the whole deal, and b) improvement in the net cash inflow from the CDN operations as the Group plans to locate more new customers from 2020 and control its operating costs and negotiate with vendors for more favorable payment terms. If the Group fails to achieve these goals, the Group may need additional financing to execute its business plan. If additional financing is required, the Group cannot predict whether this additional financing will be in the form of equity, debt, or another form, and the Group may not be able to obtain the necessary additional capital on a timely basis, on acceptable terms, or at all. In the event that financing sources are not available, or that the Group is unsuccessful in increasing its gross profit margin and reducing operating losses, the Group may be unable to implement its current plans for expansion, repay debt obligations or respond to competitive pressures, any of which would have a material adverse effect on the Group's business, prospects, financial condition and results of operations. Management prepared the consolidated financial statements assuming the Group will continue as a going concern. However, there is no assurance that the measures above can be achieved as planned. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. If the Group is unable to continue as a going concern, it may have to liquidate its assets and may receive less than the value at which those assets are carried on the financial statements. (c) Principles of consolidation The consolidated financial statements include the financial statements of the Company, its subsidiaries and the VIEs for which the Company is the primary beneficiary. All significant inter-company transactions and balances between the Company, its subsidiaries and the VIEs are eliminated upon consolidation. Results of acquired subsidiaries or VIEs are consolidated from the date on which control is transferred to the Company. (d) Use of estimates The preparation of the consolidated financial statements in conformity with U.S GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. Areas where management uses subjective judgment include, but are not limited to, estimating the useful lives of long-lived assets and intangible assets, impairment of long-term investments, long-lived assets and intangible assets, allowance for doubtful accounts, accounting for deferred income taxes, and accounting for share-based compensation arrangements. The valuation of and accounting for the Group's financial instruments also require significant estimates and judgments provided by management. Changes in facts and circumstances may result in revised estimates. Actual results could differ from those estimates, and as such, differences may be material to the consolidated financial statements. (e) Foreign currency The functional currency of the Company and each of its subsidiaries and VIEs is the Renminbi (“RMB”), except for ChinaCache US, CCAL, ChinaCache HK, ChinaCache IE, and ChinaCache UK, which are the United States dollar (“US$”), US$, Hong Kong dollar (“HK$”), Euro (“EUR”) and Great Britain Pound (“GBP”) respectively, as determined based on the criteria of Accounting Standards Codification (“ASC”) 830 (“ASC 830”) “ Foreign Currency Matters ”. The reporting currency of the Company is also the RMB. Transactions denominated in foreign currencies are re-measured into the functional currency at the exchange rates prevailing on the transaction dates. Foreign currency denominated financial assets and liabilities are re-measured at the balance sheet date exchange rate. Exchange gains and losses are included in foreign exchange gains and losses in the consolidated statements of comprehensive loss. (f) Convenience translation Amounts in US$ are presented for the convenience of the reader and are translated at the noon buying rate of US$1.00 to RMB6.8755 on December 31, 2018 in the City of New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York. No representation is made that the RMB amounts could have been, or could be, converted into US$ at such rate. (g) Cash and cash equivalents Cash and cash equivalents consist of cash on hand and demand deposits placed with banks or other financial institutions which are unrestricted as to withdrawal and use and have original maturities less than three months. For the purpose of the consolidated statements of cash flows, cash and cash equivalents also consist of cash and cash equivalents included in assets held for sale. (h) Restricted Cash Restricted cash relates to special deposit accounts required by the Education Commission for the purpose of preventing abusive use of tuition and fees of educational and training institutions, and cash frozen by a court order during the ongoing legal proceedings. (i) Accounts receivable and allowance for doubtful accounts Accounts receivable are carried at net realizable value. An allowance for doubtful accounts is recorded in the period when loss is probable based on an assessment of specific evidence indicating troubled collection, historical experience, accounts aging and other factors. An accounts receivable is written off after all collection effort has ceased. (j) Property and equipment Property and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives of the assets, as follows: Optical Fibers 20 years Computer equipment 3-15 years Furniture, fixtures and office equipment 5 years Motor vehicles 10 years Leasehold improvements Over the shorter of lease term or the estimated useful lives of the assets Freehold land in United States of America Indefinite Building 20-40 years Repair and maintenance costs are charged to expense when incurred, whereas the cost of betterments that extend the useful life of property and equipment are capitalized as additions to the related assets. Retirement, sale and disposals of assets are recorded by removing the cost and related accumulated depreciation with any resulting gain or loss reflected in the consolidated statements of comprehensive loss. Property and equipment that are purchased or constructed which require a period of time before the assets are ready for their intended use are accounted for as construction-in-progress. Construction-in-progress is recorded at acquisition cost, including installation costs. Construction-in-progress is transferred to specific property and equipment accounts and commences depreciation when these assets are ready for their intended use. The amounts of interest that would be capitalized were immaterial during the years ended December 31, 2016, 2017 and 2018. (k) Land use right The land use right represents the amounts paid and relevant costs incurred for the right to use land in the PRC and are recorded at purchase cost less accumulated amortization. Amortization is provided on a straight-line basis over the terms of the respective land use right agreement. (l) Intangible assets Intangible assets are carried at cost less accumulated amortization and any impairment. Intangible assets with a finite useful life are amortized using the straight-line method over the estimated economic life of the intangible assets as follows: Purchased software 5 years (m) Long-lived assets (disposal groups) to be disposed of by sale The Group classifies long-lived assets and disposal groups as held for sale if their carrying amounts will be recovered principally through disposal by sale rather than through continuing use. Such long-lived assets and disposal groups are measured at the lower of their carrying amount and fair value less costs to sell. Costs to sell are the incremental costs directly attributable to the sale, excluding the finance costs and income tax expense. The criteria for held for sale classification is regarded as met only when the sale is highly probable and the asset or disposal group is available for immediate sale in its present condition. Actions required to complete the sale should indicate that it is unlikely that significant changes to the sale will be made or that the decision to sell will be withdrawn. Property and equipment, land use right and intangible assets are not depreciated or amortized once classified as held for sale. Assets and liabilities classified as held for sale are presented separately as current items in the consolidated balance sheets. If circumstances arise that previously were considered unlikely and, as a result, an entity decides not to sell a long-lived asset or disposal group previously classified as held for sale, the asset or disposal group would be reclassified as held and used. The Group measures long-lived assets that are reclassified on an individually basis at the lower of the following: a. Its carrying amount before the asset or disposal group was classified as held for sale, adjusted for any depreciation or amortization expense that would have been recognized had the asset or disposal group been continuously classified as held and used; and b. A disposal group qualifies as discontinued operation if it is a component of the Group that either has been disposed of, or is classified as held for sale, and the disposal represents a strategic shift that has (or will have) a major effect on the Group’s operations and financial results. (n) Impairment of long-lived assets The Group evaluates its long-lived assets or asset group, including intangible assets with finite lives, for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying amount of an asset or a group of long-lived assets may not be recoverable. When these events occur, the Group evaluates for impairment by comparing the carrying amount of the assets to future undiscounted net cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flow is less than the carrying amount of the assets, the Group would recognize an impairment loss based on the excess of the carrying amount of the asset group over its fair value. For long-lived assets held for sale, assets are written down to fair value less cost to sell. Fair value is generally determined by discounting the cash flows expected to be generated by the assets, when the market prices are not readily available for the long-lived assets. Impairment charge of RMB399,094,000, RMB21,757,000 and nil was recognized from properties and equipment and intangible assets for the years ended December 31, 2016, 2017 and 2018, respectively. (o) Investments Available-for-sale investments Investments not classified as trading or as held-to-maturity are classified as available-for-sale securities. Such available-for-sale investments are reported at fair value, with unrealized gains and losses recorded in accumulated other comprehensive loss in shareholders’ deficit. Realized gains or losses are charged to earnings during the period in which the gain or loss is realized. If the Group determines a decline in fair value is other-than-temporary, the cost basis of the individual security is written down to its estimated fair value. The new cost basis will not be adjusted for subsequent recoveries in fair value. Determination of whether declines in value are other-than-temporary requires significant judgment. Subsequent increases and decreases in the fair value of available-for-sale securities will be included in other comprehensive loss except for other-than-temporary impairment, which would be charged to current period earnings. Impairment of available-for-sale investments for the years ended December 31, 2016, 2017 and 2018 were nil, RMB 3,290,000 and nil, respectively. Investment in limited partnerships Where consolidation is not appropriate, the Group applies the equity method of accounting that is consistent with ASC 323 “Investments - Equity Method and Joint Ventures” to limited partnerships in which the Group holds either (a) a five percent or greater interest or (b) less than a five percent interest when the Group has more than virtually no influence over the operating or financial policies of the limited partnership. The Group considers certain qualitative factors in assessing whether it has more than virtually no influence for partnership interests of less than five percent. For investments other than those described in (a) and (b) above, the Group applies the cost method of accounting. Cost method investment Prior to adopting ASC Topic 321 (“ASC 321”), Investments – Equity Securities, on January 1, 2018, the Group carries at cost its investments in investees that do not have readily determinable values or investments and over which the Group does not have significant influence, in accordance with ASC subtopic 325-20 (“ASC 325-20”), Investments-Other: Cost Method Investments. The Group carries the investment at cost and only adjusts for other-than-temporary declines in fair value and distributions of earnings that exceed the Group's share of earnings since its investment. Management regularly evaluates the impairment of equity investments without readily determinable fair value based on the performance and financial position of the investee as well as other evidence of market value. Such evaluation includes, but is not limited to, reviewing the investee’s cash position, recent financing, projected and historical financial performance, cash flow forecasts and financing needs. An impairment loss is recognized in earnings equal to the excess of the investment’s cost over its fair value at the balance sheet date of the reporting period for which the assessment is made. The fair value would then become the new cost basis of investment. Impairment of cost method investment for the years ended December 31, 2016, 2017 and 2018 were RMB18,240,000, RMB400,000 and nil, respectively. The Group adopted ASC 321 on January 1, 2018 and the cumulative effect of adopting the new standard on opening accumulated deficit is nil. Pursuant to ASC 321, equity investments, except for those accounted for under the equity method and those that result in consolidation of the investee and certain other investments, are measured at fair value, and any changes in fair value are recognized in earnings. For equity securities without readily determinable fair value and do not qualify for the existing practical expedient in ASC Topic 820 (“ASC 820”), Fair Value Measurements and Disclosures, to estimate fair value using the net asset value per share (or its equivalent) of the investment, the Group elected to use the measurement alternative to measure those investments at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer, if any. Equity securities with readily determinable fair value are measured at fair values, and any changes in fair value are recognized in earnings. Pursuant to ASC 321, for equity investments measured at fair value with changes in fair value recorded in earnings, the Group does not assess whether those securities are impaired. For those equity investments that the Group elects to use the measurement alternative, the Group makes a qualitative assessment of whether the investment is impaired at each reporting date. If a qualitative assessment indicates that the investment is impaired, the entity has to estimate the investment’s fair value in accordance with the principles of ASC 820. If the fair value is less than the investment’s carrying value, the entity has to recognize an impairment loss in net income equal to the difference between the carrying value and fair value. (p) Fair value of financial instruments The carrying amounts of financial assets and liabilities, such as cash and cash equivalents, restricted cash, accounts receivable, other receivables included in prepaid expenses and other current assets, short-term investments, short term borrowings, accounts payables, accrued expenses, balances with related parties and other payables, approximate their fair values because of the short-term maturity of these instruments. The carrying amounts of long-term borrowings approximates its fair value since it bears interest rate which approximates market interest rates. Available-for-sale investments were initially recognized at cost and subsequently remeasured at the end of each reporting period with the adjustment in its fair value recognized in accumulated other comprehensive income. The Group, with the assistance of an independent third-party valuation firm, determined the estimated fair value of its available-for-sale investments that are recognized in the consolidated financial statements. (q) Revenue recognition The Group provides a portfolio of content and application delivery total solutions within its one class of services, such as, web page content services; file transfer services; rich media streaming services; guaranteed application delivery; managed internet data services; cloud services; content bridging services; mobile internet solution; and value-added services to its customers that in turn improve the performance, reliability and scalability of their internet services and applications. On January 1, 2018, the Group adopted ASU No. 2014-09, Revenue from Contracts with Customers, (“ASC 606”), which supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition, (“ASC 605”), using the modified retrospective transition method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts have not been adjusted and continue to be reported in accordance with historic accounting under ASC 605. The impact of adopting the new revenue standard was not material to consolidated financial statements and there was no adjustment to beginning retained earnings on January 1, 2018. Under ASC 606, an entity recognizes revenue as the Company satisfies a performance obligation when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price, including variable consideration, if any; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration to which it is entitled in exchange for the goods or services it transfers to the customer. Once a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews the contract to determine which performance obligations it must deliver and which of these performance obligations are distinct. The Company recognizes revenue based on the amount of the transaction price that is allocated to each performance obligation when that performance obligation is satisfied or as it is satisfied. The Company is a principal and records revenue on a gross basis when the Company is primarily responsible for fulfilling the service, has discretion in establish pricing and controls the promised service before transferring that service to customers. Otherwise, the Company records revenue at the net amounts as commissions. The Group generates revenue from CDN, IDC and IX services under ASC Topic 606: CDN Services CDN is a content distribution network built on the network. Relying on the edge servers deployed in various regions, through load balancing, content distribution, scheduling and other functional modules of the central platform, CDN enables users to obtain the required content nearby, reduces network congestion, and improves user access response speed and hit rate. For revenue stream of CDN, the promised service is to provide CDN service to the customer, which is qualified as a single distinct performance obligation. The contract price is fixed when entered into by the both parties. CDN services are typically provided to customers over the contract service period and the related revenues are recognized on a straight-line basis over the term of the contract. The Group is a principal and records revenue for CDN service on a gross basis. IDC Services IDC services provide cabinet rental and bandwidth service to customer. The Company provides two promised services, cabinet rental and bandwidth service. According to 606-10-25-19, though the service is capable of being distinct as the customer can benefit from the good or service on its own, which is evidenced by the fact that these two services are capable of being separated by its nature. However, the promise to transfer service is not distinct within the context of the contract and the goal of IDC is to combine traditional internet data center and content delivery. The reason why the customers renting the Company's cabinet is not only to benefit from the Company's physical hosting location and maintenance service, but also to enjoy the bandwidth service provided by the Company. It is cost efficient to consume the Company's bandwidth service rather than to connect directly to bandwidth service provider such as China Unioncom or China Mobile. Thus these two promise service within the contract of IDC service-cabinet rental and bandwidth service are not distinct and shall be identified as one performance obligation. Typically IDC services are provided to customers for a fixed amount over the contract service period and the related revenues are recognized on a straight-line basis over the term of the contract. The Group is a principal and records revenue for IDC service on a gross basis. IX Services IX Services allow networks to interconnect directly, via the exchange, rather than through one or more third-party networks. The primary advantages of direct interconnection are cost, latency, and bandwidth. Same as IDC, there are two promised service within the contract, one is to provide a port usage and the other is to provide bandwidth. However, the service is not distinct within context of the contract as the services provided is highly integrated. Thus only one performance obligation is indentified for IX revenue stream. The contract price is fixed when entered into by the both parties. IX services are provided to customers over the contract service period and the related revenues are recognized on a straight-line basis over the term of the contract. The Group is a principal and records revenue for IX service on a gross basis. Effective in September 2012, 6% of value-added tax, or VAT, replaced the original 5% business tax in Beijing as a result of the PRC government’s pilot VAT reform program, which applies to all services provided by ChinaCache Beijing and Beijing Jingtian and certain services provided by Beijing Blue IT. Effective in June 2014, 6% of VAT replaced the original 3% business tax in Beijing as a result of the PRC government’s pilot VAT reform program on telecom industry, which applies to all services provided by Beijing Blue IT. Disaggregation of revenues The following table illustrates the disaggregation of revenue by revenue stream and by timing of revenue recognition for the years ended December 31, 2016, 2017 and 2018: For the Years Ended December 31, 2016 2017 2018 RMB’000 RMB’000 RMB’000 US$’000 CDN Services 927,903 669,938 709,498 103,192 IDC Services 85,314 149,316 185,973 27,049 IX Services 41,018 33,314 27,120 3,944 Total 1,054,235 852,568 922,591 134,185 The following table provides information about accounts receivables and contract liabilities from contracts with customers: Years as of December 31, 2017 2018 RMB’000 RMB’000 US$’000 Accounts receivables 161,043 210,476 30,612 Advance from customers 10,361 18,598 2,705 (q) Cost of revenues Cost of revenue consists primarily of depreciation of the Group's long-lived assets, amortization of acquired intangible assets, maintenance, purchase of bandwidth and other overhead expenses directly attributable to the provision of content and application delivery total solutions. All the services provided by the Group in the PRC, including VIEs are subject to VAT. Such VAT (to the extent that is non-deductible) and other surcharges are accrued and charged to cost of revenues as the related exclusive business support, technical and consulting services are rendered. (r) Advertising expenditures Advertising expenditures are expensed as incurred. Advertising expenditures, included in sales and marketing expenses, amounted to approximately RMB233,018, RMB 200,000 and nil for the years ended December 31, 2016, 2017 and 2018, respectively. (s) Research and development costs Research and development costs consist primarily of payroll and related personnel costs for minor routine upgrades and related enhancements to the Group's services and network. Costs incurred in the development of the Group's services are expensed as incurred. To date, the amount of costs qualifying for capitalization has been insignificant. (t) Government grant Government grant are provided by the relevant PRC municipal government authorities to subsidize the cost of certain research and development projects. The amount of such government grant is determined solely at the discretion of the relevant government authorities and there is no assurance that the Group will continue to receive these government grant in the future. Government grant are recognized when it is probable that the Group will comply with the conditions attached to them, and the grant are received. When the grant relates to an expense item, it is recognized as deferred government grant and released to the consolidated statements of comprehensive loss over the period necessary to match the grant on a systematic basis to the costs that it is intended to compensate, as other operating income. Where the grant relates to an asset, it is recognized as deferred government grant and released to the consolidated statements of comprehensive loss in equal amounts over the expected useful life of the related asset, when operational, as other operating income. Government grant received by the Group also consist of unrestricted grant which are received on an unsolicited and unconditional basis to support the growth of the Group and do not relate to the Group 's operating activities. Unrestricted grant is classified as non-operating income and recorded in other income on the consolidated statements of comprehensive loss upon receipt. (u) Leases Leases are classified at the inception date as either a capital lease or an operating lease. The Group did not enter into any leases whereby it is the lessor for any of the periods presented. The Group leases equipment under capital lease agreements. As the lessee, a lease is a capital lease if any of the following conditions exists: a) ownership is transferred to the lessee by the end of the lease term, b) there is a bargain purchase option, c) the lease term is at least 75% of the property’s estimated remaining economic life, or d) the present value of the minimum lease payments at the beginning of the lease term is 90% or more of the fair value of the leased property to the lessor at the inception date. A lease involving integral equipment is a capital lease only if condition (a) or (b) exists. A capital lease is accounted for as if there was an acquisition of an asset and an incurrence of an obligation at the inception of the lease. All other leases are accounted for as operating leases wherein rental payments are expensed on a straight-line basis over the periods of their respective leases. The Group leases office space under operating lease agreements. Certain of the lease agreements contain rent holidays. Rent holidays are considered in determining the straight-line rent expense to be recorded over the lease term. The lease term begins on the date of initial possession of the lease property for purposes of recognizing lease expense on a straight-line basis over the term of the lease. The excess of rent expense and rent paid, as the case may be for respective leases, is recorded as deferred rental included in the prepaid expenses and other current assets in the consolidated balance sheets. (v) Income taxes The Group follows the liability method in accounting for income taxes in accordance to ASC topic 740 "Taxation" (“ASC 740”), Income Taxes. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Group records a valuation allowance against deferred tax assets if, based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The Group adopted ASC 740 to account for uncertainty in income taxes. ASC 740 clarifies the accounting for uncertainty in income taxes by prescribing the recognition threshold a tax position is required to meet before being recognized in the consolidated financial statements. The Group has elected to classify interest and penalties related to unrecognized tax benefits, if and when required, as part of “interest expense” and “other expenses,” respectively, in the consolidated statements of comprehensive loss. (w) Share-based compensation Share options and restricted share units award granted to employees are accounted for under ASC 718 “Compensation – Stock Compensation” . In accordance with ASC 718, the Company determines whether share options or restricted share units award should be classified and accounted for as liability or equity award. All grants of share options and restricted share units award to employees classified as equity award are recognized in the financial statements over their requisite service periods based on their grant date fair values. The Company has elected to recognize compensation expenses using the accelerated method for its share options and restricted share units granted. For restricted share awards granted with performance conditions, the Company commences recognition of the related compensation expense if it is probable the defined performance condition will be met. To the extent that the Company determines that it is probable that a different number of share-based awards will vest depending on the outcome of the performance condition, the c |
CONCENTRATION OF RISK
CONCENTRATION OF RISK | 12 Months Ended |
Dec. 31, 2018 | |
CONCENTRATION OF RISK | |
CONCENTRATION OF RISK | 3. CONCENTRATION OF RISK (a) Credit risk Financial instruments that potentially subject the Group to significant concentrations of credit risk consist primarily of cash and cash equivalents, accounts receivable, other receivables included in prepaid expenses and other current assets, available-for-sale investments and amounts due from related parties. As of December 31, 2017 and 2018, RMB91,588,000 and RMB32,097,000 (US$4,668,000), respectively, were deposited with major financial institutions located in the PRC, RMB2,129,000 and RMB8,811,000 (US$1,282,000), respectively, were deposited with in the major financial institutions located in the Hong Kong Special Administration Region, RMB253,000 and nil, respectively were held in major financial institutions located in Europe, RMB3,078,000 and RMB2,076,000 (US$302,000), respectively, were deposited with major financial institutions located in the UK and RMB9,661,000 and RMB3,646,000 (US$530,000), respectively were held in major financial institutions in the United States of America. Management believes that these financial institutions are of high credit quality and continually monitor the credit worthiness of these financial institutions. Historically, deposits in Chinese banks are secure due to the state policy on protecting depositors’ interests. However, China promulgated a new Bankruptcy Law in August 2006 that came into effect on June 1, 2007, which contains a separate article expressly stating that the State Council may promulgate implementation measures for the bankruptcy of Chinese banks based on the Bankruptcy Law. Under the new Bankruptcy Law, a Chinese bank may go into bankruptcy. In addition, since China’s concession to the World Trade Organization, foreign banks have been gradually permitted to operate in China and have been significant competitors against Chinese banks in many aspects, especially since the opening of the Renminbi business to foreign banks in late 2006. Therefore, the risk of bankruptcy of those Chinese banks in which the Group has deposits has increased. In the event of bankruptcy of one of the banks which holds the Group's deposits, it is unlikely to claim its deposits back in full since it is unlikely to be classified as a secured creditor based on PRC laws. (b) Business, supplier, customer, and economic risk The Group participates in a relatively young and dynamic industry that is heavily reliant and also susceptible to complementary and/or competitive technological advancements. The Group believes that changes in any of the following areas could have a material adverse effect on the Group's future financial position, results of operations or cash flows: (i) (ii) (iii) Years as of December 31, 2016 2017 2018 RMB’000 RMB’000 RMB’000 US$’000 Customer A 346,764 317,260 503,676 73,257 Customer B 94,974 * * * Customer C * 118,970 * * Details of the accounts receivables for customers accounting for 10% or more of total accounts receivable are as follows: Years as of December 31, 2017 2018 RMB’000 RMB’000 US$’000 Customer A 73,442 122,504 17,817 *not greater than 10% (iv) Emerging or unproven business models of customers. Many of the Group's existing and potential customers are pursuing emerging or unproven business models which, if unsuccessful, could lead to a substantial decline in demand for the Group's services, and the Group's growth and prospects may be materially and adversely affected. (v) Political, economic and social uncertainties. The Group's operations could be adversely affected by significant political, economic and social uncertainties in the PRC. Although the PRC government has been pursuing economic reform policies for more than 20 years, no assurance can be given that the PRC government will continue to pursue such policies or that such policies may not be significantly altered, especially in the event of a change in leadership, social or political disruption or unforeseen circumstances affecting the PRC political, economic and social conditions. There is also no guarantee that the PRC government’s pursuit of economic reforms will be consistent or effective. (vi) Regulatory restrictions. The applicable PRC laws, rules and regulations currently prohibit foreign ownership of companies that provide content and application delivery services. Accordingly, both the Company’s subsidiaries, ChinaCache Beijing and Xin Run are currently ineligible to apply for the required licenses for providing content and application delivery services in China. As a result, the Company operates its business in the PRC through its VIEs, which holds the licenses and permits required to provide content and application delivery services in the PRC. The PRC Government may also choose at any time to block access to the Company's customers’ content which could also materially impact the Company's ability to generate revenue. (c) Currency convertibility risk Half of the Group's businesses are transacted in RMB, which is not freely convertible into foreign currencies. On January 1, 1994, the PRC government abolished the dual rate system and introduced a single rate of exchange as quoted daily by the People’s Bank of China. However, the unification of the exchange rates does not imply the convertibility of RMB into US$ or other foreign currencies. All foreign exchange transactions continue to take place either through the People’s Bank of China or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the People’s Bank of China. Approval of foreign currency payments by the People’s Bank of China or other institutions requires submitting a payment application form together with suppliers’ invoices, shipping documents and signed contracts. (d) Foreign currency exchange rate risk From July 21, 2005, the RMB is permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. The depreciation/(appreciation) of the RMB against US$ was approximately 7.2%, (6.3)% and 5.7% in the years ended December 31, 2016, 2017 and 2018, respectively. Most of revenues and costs of the Company are denominated in RMB, while a portion of cash and cash equivalents, short-term financial assets and investments denominated in U.S. dollars. Any significant revaluation of RMB may materially and adversely affect the Company’s cash flows, revenues, earnings and financial position, and the value of, and any dividends payable on, the ADS in US$. |
CASH ,CASH EQUIVALENTS AND REST
CASH ,CASH EQUIVALENTS AND RESTRICTED CASH | 12 Months Ended |
Dec. 31, 2018 | |
CASH ,CASH EQUIVALENTS AND RESTRICTED CASH | |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 4. CASH, CASH EQUIVALENTS AND RESTRICTED CASH Cash, cash equivalents and restricted cash consist of the following: December 31, 2017 2018 RMB’000 RMB’000 US$’000 Cash and cash equivalents on the consolidated balance sheets 106,708 41,127 5,982 December 31, 2017 2018 RMB’000 RMB’000 US$’000 Restricted cash — 5,461 794 As of December 31, 2018, restricted cash represent the cash frozen by court order for the ongoing legal proceedings. |
ACCOUNTS RECEIVABLE, NET
ACCOUNTS RECEIVABLE, NET | 12 Months Ended |
Dec. 31, 2018 | |
ACCOUNTS RECEIVABLE, NET | |
ACCOUNTS RECEIVABLE, NET | 5. ACCOUNTS RECEIVABLE, NET Accounts receivable and allowance for doubtful accounts consist of the following: December 31, 2017 2018 RMB’000 RMB’000 US$’000 Accounts receivable 242,344 292,842 42,591 Less: allowance for doubtful accounts (81,301) (82,366) (11,979) 161,043 210,476 30,612 As of December 31, 2017 and 2018, all accounts receivable were due from third party customers. An analysis of the allowance for doubtful accounts is as follows: December 31, 2017 2018 RMB’000 RMB’000 US$’000 Balance, beginning of year 63,921 81,301 11,824 Additions for the current year 18,432 6,719 977 Recovery (1,052) (5,654) (822) Balance, end of year 81,301 82,366 11,979 The carrying amount of RMB12,989,000 accounts receivable was pledged by the Company to secure capital lease (Note 17) granted to the Group as of December 31, 2018. |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 12 Months Ended |
Dec. 31, 2018 | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 6. PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET Prepaid expenses and other current assets consist of the following: December 31, 2017 2018 RMB’000 RMB’000 US$’000 Prepaid expense for bandwidth and servers (i) 4,029 9,491 1,380 Staff field advances 525 596 87 Capital lease deposits 29,224 1,684 245 Prepaid commission (ii) 99,700 99,700 14,501 Prepaid service fee 30,200 10,000 1,454 Other deposit and receivables(iii) 35,933 34,095 4,959 Prepaid income tax 13,534 14,220 2,068 Prepaid expense and other current assets 213,145 169,786 24,694 Provision of doubtful accounts (161) (151) (22) Prepaid expense and other current assets, net 212,984 169,635 24,672 i) ii) iii) |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2018 | |
PROPERTY AND EQUIPMENT, NET | |
PROPERTY AND EQUIPMENT, NET | 7. PROPERTY AND EQUIPMENT, NET Property and equipment, including those held under capital leases, consists of the following: December 31, 2017 2018 RMB’000 RMB’000 US$’000 At cost: Optical fibers 13,100 13,100 1,905 Computer equipment 928,293 1,004,948 146,164 Furniture and fixtures 10,612 10,218 1,486 Leasehold improvements 18,769 18,782 2,732 Motor vehicles 10,157 9,842 1,431 Buildings 58,150 324,716 47,228 Freehold land 4,275 4,517 657 1,043,356 1,386,123 201,603 Less: accumulated depreciation (587,032) (567,835) (82,588) Less: impairment (402,998) (403,221) (58,646) 53,326 415,067 60,369 For the years ended December 31, 2016, 2017 and 2018, depreciation expenses were RMB155,225,000, RMB9,145,000 and RMB12,017,000 (US$1,747,000), respectively, and were included in the following captions: For the years ended December 31, 2016 2017 2018 RMB’000 RMB’000 RMB’000 US$’000 Cost of revenue 130,724 8,090 11,999 1,745 Sales and marketing expenses 138 4 — — General and administrative expenses 11,799 1,050 9 1 Research and development expenses 12,564 1 9 1 155,225 9,145 12,017 1,747 The Group accounted for the leases of certain computer equipment and optical fibers as capital leases that transfer to the Group substantially all the benefits and risks incidental to the ownership of assets. The carrying amounts of the Group's property and equipment held under capital leases at respective balance sheet dates were as follows: December 31, 2017 2018 RMB’000 RMB’000 US$’000 At Cost: Optical fibers 13,100 13,100 1,905 Computer equipment 228,489 292,489 42,541 241,589 305,589 44,446 Less: accumulated depreciation (75,427) (75,644) (11,002) Less: impairment (166,162) (166,162) (24,167) — 63,783 9,277 Depreciation of property and equipment held under capital leases were nil, nil and RMB217,000 for the years ended December 31, 2016, 2017 and 2018, respectively. The carrying amount of buildings mortgaged by the Group to secure borrowings (Note 13) and capital lease obligation (Note 17) granted to the Group as of December 31, 2017 and 2018 was nil and RMB298,232,000, respectively. Subsequently, all the buildings were sealed up by the court due to the lawsuits by the end of November, 2019 (Note 27). |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2018 | |
INTANGIBLE ASSETS | |
INTANGIBLE ASSETS | 8. INTANGIBLE ASSETS The Group's intangible assets represents software purchased, the following table presents the movement of Group's intangible assets from January 1, 2017 to December 31, 2018: December 31, 2017 2018 RMB’000 RMB’000 US$’000 Purchased software, net - beginning — 165 24 Addition 993 42 6 Reclassified from assets held for sale (Note 10) 4,258 — — Less: amortization (1,216) (64) (9) Less: impairment (3,870) — — 165 143 21 The Group recognized RMB11,728,000, RMB3,870,000 and nil impairment loss for the years ended December 31, 2016, 2017 and 2018, respectively. The estimated annual amortization expense for each of the five succeeding fiscal years is as follow: Amortization RMB’000 US$’000 For the years ending December 31, 2019 64 9 2020 59 9 2021 8 1 2022 8 1 2023 4 1 |
LAND USE RIGHT
LAND USE RIGHT | 12 Months Ended |
Dec. 31, 2018 | |
LAND USE RIGHT | |
LAND USE RIGHT | 9. LAND USE RIGHT December 31 2017 2018 RMB’000 RMB’000 US$’000 Land use right 34,057 34,057 4,953 Less: accumulated amortization (1,155) (1,885) (274) 32,902 32,172 4,679 In 2013, the Group paid RMB51,678,000 to acquire a land use right of approximately 39,000 square meters of land in Beijing Shunyi District, on which the Group developed a cloud infrastructure. According to the land use right contract, the Company has a 50-year use right over the land, which is used as the basis for amortization. In December 2015, the land use right was reclassified and included in assets held for sale therefore no amortization was recognized since then. In December 2017, land use right, excluding land use right held by Beijing Shuo Ge and Beijing Zhao Du, was transferred out from the assets held for sale and re-designated as assets held for use (Note 10). The Group re-measured the amortization expense that would have been recognized had the land use right been continuously classified as held and used. Amortization expense for land use right for the years ended December 31, 2016, 2017 and 2018 was nil, RMB1,155,000 and RMB730,000 (US$106,000), respectively. The carrying amount of land use right pledged by the Group to secure borrowings (Note 13) granted to the Group as of December 31, 2017 and 2018 was RMB32,902,000 and RMB32,172,000, respectively. Subsequently, all the land use right (excluding land use right held by Beijing Shuo Ge and Beijing Zhao Du) were sealed up by the court due to the lawsuits (Note 27) on August 1, 2019. |
ASSETS HELD FOR SALE _ LIABILIT
ASSETS HELD FOR SALE / LIABILITIES HELD FOR SALE | 12 Months Ended |
Dec. 31, 2018 | |
ASSETS HELD FOR SALE / LIABILITIES HELD FOR SALE | |
ASSETS HELD FOR SALE / LIABILITIES HELD FOR SALE | 10. ASSETS HELD FOR SALE / LIABILITIES HELD FOR SALE On November 27, 2015, the Group entered into definitive sale and purchase agreements to dispose of 60% equity interest in its subsidiary, Xin Run, to three parties, including a 38% interest to a group owned by the Founders (the “2015 Agreement”). Xin Run owns and operates ChinaCache’s Atecsys Cloud Data Center (“Atecsys”) and is expected to build China’s first Internet Exchange. As a result, assets and liabilities subject to the purchase and sale agreements were classified as held for sale in the Company's December 31, 2015 consolidated balance sheet. On March 6, 2017, the Group entered into a new definitive agreement to sell 79% of its equity interest in Xin Run to a group of investors for RMB221 million in cash before fees and expenses, including 52.67% interest to two companies owned by the Founders (the “2017 Agreement”). The completion of the transaction was subject to customary closing conditions, including obtaining requisite governmental registration. The transaction was approved by the Board of Directors of the Company, acting upon the unanimous recommendation of its audit committee, consisting of independent and disinterested directors. The Group terminated the 2015 Agreement. Assets and liabilities classified as held for sale are required to be recorded at the lower of carrying value or fair value less any costs to sell. As of December 31, 2015 and 2016, the carrying value of Xin Run’s net assets were less than fair value less costs to sell, and accordingly, no adjustment to the asset value was necessary. Xin Run did not meet the criteria to be classified as discontinued operations because it did not comprise a major component of the Group's operations. On December 28, 2017, the Board of Directors approved to terminate the 2017 Agreement. As a result, all of the assets and liabilities of Xin Run and its subsidiaries were reclassified as held and used as of December 31, 2017, with the exception of two subsidiaries under Xin Run, Beijing Shuo Ge and Beijing Zhao Du, which continued to qualify as assets held for sale under existing arrangements with buyers. On March 23, 2018, the Group finalized the termination agreement with relevant parties. On December 30, 2014, Xin Run entered into a definitive sale and leaseback agreement with Beijing Federation of Supply and Marketing Cooperatives ("BFSMC"), according to which Xin Run should hand over to BFSMC two IDC buildings (5# and 6#) by September 2015 for a consideration of RMB 960 million through transferring the ownership of the two IDC buildings from Xin Run to Zhao Du, and selling all Zhao Du's equity interests to BFSMC. On February 6, 2015, Xin Run entered into a supplementary agreement with BFSMC and one subsidiary of BFSMC, according to which the subsidiary became the beneficiary of the original arrangement and took over the rights and obligations from February 27, 2015. Consideration of RMB 672 million was received from the subsidiary by September 2015. In April 2014, Xin Run entered into a framework agreement with a third-party company, pursuant to which Xin Run agreed to sell the IDC building 3# to it. In August 2014, the Company established Shuo Ge. The consideration of RMB 325 million was received from the third-party company by January 2015. In July 2015, Xin Run sold the total CIP along with related land use right of IDC building 3# to Shuo Ge. On December 29, 2017, Xin Run entered into an equity transfer agreement with the third-party company, under which Xin Run would transfer 100% equity interest in Shuo Ge to it before September 2018. As of today, Zhao Du is still in the process of litigation proceeding with the buyer (Note 26). The disposal of Shuo Ge was completed subsequently in May 2019 (Note 27). The major classes of assets and liabilities held for sale were as follows: December 31, 2017 2018 RMB’000 RMB'000 US$’000 Cash and cash equivalents 1 1 — Prepaid expenses and other current assets 15,478 15,478 2,252 Amounts due from the Company 737 737 107 Property and equipment 550,606 550,225 80,027 Land use right, net 14,909 14,909 2,168 Assets held for sale 581,731 581,350 84,554 Accrued expenses and other current liabilities 1,863 5,293 770 Amounts due to the Company 2,025 2,698 392 Liabilities held for sale 3,888 7,991 1,162 The operating results of the subsidiaries held for sale during the three years ended December 31, 2018 that are not presented within discontinued operations are summarized as follow: For the years ended December 31, 2016 2017 2018 RMB’000 RMB’000 RMB’000 US$’000 Net revenue 2,442 — — — Loss before income taxes (107,399) (3,000) (3,654) (531) Loss before income taxes attributable to the non-controlling interest for the years ended December 31, 2016, 2017 and 2018 was RMB1,074,000, RMB30,000 and RMB36,000 (US$5,000), respectively. |
CLOUD INFRASTRUCTURE CONSTRUCTI
CLOUD INFRASTRUCTURE CONSTRUCTION IN PROGRESS | 12 Months Ended |
Dec. 31, 2018 | |
CLOUD INFRASTRUCTURE CONSTRUCTION IN PROGRESS | |
CLOUD INFRASTRUCTURE CONSTRUCTION IN PROGRESS | 11. CLOUD INFRASTRUCTURE CONSTRUCTION IN PROGRESS December 31, 2017 2018 RMB’000 RMB’000 US$’000 Cloud infrastructure construction in progress 416,352 289,280 42,074 As of December 31, 2016, the Group capitalized direct costs of RMB977,194,000 that were directly attributable to the development of the cloud infrastructure. During the year ended December 31, 2017, additional costs of RMB35,841,000 were capitalized for buildings completed during the year. Total costs incurred directly attributable to the development of the cloud infrastructure was RMB1,013,035,000 as of December 31, 2017. Of which, RMB550,606,000 capitalized for completed buildings held under Beijing Shuo Ge and Beijing Zhao Du was transferred to assets held for sale property and equipment whereas costs of other completed buildings in the aggregate of RMB39,927,000 and costs of other completed equipment in the aggregate of RMB6,150,000 were transferred to property and equipment. The remaining RMB416,352,000 capitalized to date for construction in progress was re-designated as cloud infrastructure construction in progress as of December 31, 2017. During the year ended December 31, 2018, additional costs of RMB332,906,000 (US$48,419,000) was capitalized for buildings completed. Costs of other completed buildings in the aggregate of RMB265,532,000 (US$38,620,000) and costs of other completed equipment s in the aggregate of RMB104,078,000 (US$15,137,000) were transferred to property and equipment; RMB91,128,000 (US$13,254,000) was transferred to other non-current assets. As of December 31, 2018, the remaining RMB289,280,000 (US$42,074,000) capitalized to date for construction in progress was re-designated as cloud infrastructure construction in progress. The cloud infrastructure was sealed up by court subsequently (Note 27). The carrying amount of cloud infrastructure construction in progress pledged by the Group to secure borrowings (Note 13) granted to the Group as of December 31, 2017 and 2018 was RMB416,352,000 and RMB289,2800,000, respectively. |
LONG TERM INVESTMENTS
LONG TERM INVESTMENTS | 12 Months Ended |
Dec. 31, 2018 | |
LONG TERM INVESTMENTS | |
LONG TERM INVESTMENTS | 12. LONG TERM INVESTMENTS Long term investments consisted of the following: December 31, 2017 2018 RMB’000 RMB’000 US$’000 Cost method investments: PRC Fund 10,103 10,103 1,469 United States Fund 20,045 20,045 2,916 Investment in Flashapp Inc. (“Flashapp”) 12,240 12,240 1,780 Investment in ordinary shares of an unlisted company in PRC ("Investee A") 6,000 6,000 873 Investment in preferred shares of an unlisted company in PRC ("Investee B") 400 400 58 Available-for-sale investments: Investment in convertible borrowings of an unlisted company in Cayman Islands ("Investee D") 3,973 3,973 578 Less: accumulated impairment (22,613) (22,613) (3,289) Total 30,148 30,148 4,385 Cost method investments In 2017, the Group made an additional RMB361,000 (US$53,000) investment in the United States Fund. As of December 31, 2017 and 2018, the Group had made an accumulated investment in the United States Fund of RMB20,045,000. Given that the Group holds less than five percent interest in each fund, the Group has accounted for such investments using the cost method. In 2011, the Company made a 9-year term investment in the PRC Fund in the amount of RMB 10,103,000. Given that the Company holds less than five percent interest in each fund, the Company has accounted for such investments using the cost method. In 2013, the Group entered into an agreement with Flashapp, a private company in Cayman Island to purchase 13,971,428 Series A Preferred Shares for RMB12,240,000. The Company has the contingent redemption right on or after five years from the issuance date to request redemption of all its Series A Preferred Shares holders, at a redemption price equal to 120% of its original issuance price. The Board of Directors of Flashapp shall consist of five persons, where the Company, as a majority of Series A Preferred Shares may appoint two directors. The Group, through the directors appointed, has the ability to exercise significant influence over the operating and financial policies of Flashapp and hence, Flashapp is a related party of the Group. However, the Series A Preferred Shares are not in substance common stock and therefore the Group has accounted for the investment as cost method investment carried at cost. In 2016, the Group believed that there was a decline in value that was other than temporary and recorded RMB12,240,000 in "impairment of long-term investments" in the consolidated statement of comprehensive loss. On August 25, 2014, the Group entered into an agreement with an unlisted company in the PRC ("Investee A") to acquire 6.25% interest for RMB6,000,000. The Company has accounted for the investment as cost method investments carried at cost. In 2016, the Company believed that there was a decline in value that was other than temporary, and recorded RMB6,000,000 in "impairment of long-term investments" in the consolidated statement of comprehensive loss. Investment in investee B was fully impaired in 2017. Available for sale investments On February 19, 2014, the Company entered into an agreement with a private company in Cayman Islands (“Investee D”) to issue a convertible loan of RMB3,068,000 at an interest rate of US prime rate plus 2% for 2 years. The Company has the right to request conversion of all its convertible loan upon Investee D’s successful Series A financing, at a price less than 25% of its Series A financing price. The Company has accounted for the investment in the convertible loan as an available for sale investment where such investment will be carried at fair value, with unrealized gains and losses reported as other comprehensive income/(loss) in the consolidated statements of comprehensive loss until realized. In 2016, the Company agreed to extend the terms of the convertible loan to August 19, 2017 and expected to exercise its conversion option upon the completion of Series A financing. In 2017, the Group believed that there was a decline in value that was other than temporary, and recorded RMB3,290,000 (US$506,000) in “impairment of long-term investments” in the consolidated statement of comprehensive loss. |
BORROWINGS
BORROWINGS | 12 Months Ended |
Dec. 31, 2018 | |
BORROWINGS | |
BORROWINGS | 13. BORROWINGS (a) Short-term borrowings Short-term borrowings consisted of the following: December 31, 2017 2018 RMB’000 RMB’000 US$’000 Bank loan 9,960 — — Other borrowing — 13,850 2,014 Total 9,960 13,850 2,014 On November 14, 2017, the Group entered into a short-term loan agreement with Bank A in PRC for credit loan of RMB9,960,000, with an interest rate of 7.395% per annum and a maturity term of twelve months. The loan was fully repaid in 2018. On October 11 and December 29, 2018, the Group entered into short-term loan agreements with Third-party A in PRC for credit loan of RMB11,850,000 (US$1,723,000) and RMB500,000 (US$73,000) with an interest rate of 12% per annum and a maturity term of four months and fifteen days, respectively. Mr. Wang Song, the Co-Founder and ex-director of the Company, provided general guarantee for this short-term borrowing. On December 29, 2018, the Group entered into short-term loan agreement with Third-party B in PRC for credit loan of RMB1,500,000 (US$218,000) with an interest rate of 12% per annum and a maturity term of one month. All the short-term borrowings as of December 31, 2018 were fully repaid on due date subsequently. (b) Long-term borrowings December 31, 2017 2018 RMB’000 RMB’000 US$’000 Long-term bank loan 209,598 372,926 54,239 Long-term other borrowing 34,622 — — Less: current portion (32,642) (58,355) (8,487) Total 211,578 314,571 45,752 On October 30, 2017, the Group obtained a three-year credit facility of RMB240,000,000 from Bank B in PRC, at 8.00004% per annum. The credit facility includes RMB150,000,000 for working capital and RMB90,000,000 for capital expenditure. The credit facility is secured by Xin Run’s assets, while Mr. Wang Song and Ms. Kou Xiaohong, the Founders and ex- directors of the Company, takes joint-and-several liability for the repayment of the loan. The Company paid RMB2,400,000 to a third-party agent in December 2017 as borrowing cost to obtained the facility. On November 7, 2017, the first RMB150,000,000 was drawn down and used as working capital. On December 13, 2017, the second RMB23,000,000 was drawn down and used for capital expenditure. On January 30, 2018, the third RMB27,000,000 (US$3,927,000) was drawn down and used for capital expenditure. The borrowing cost paid for the facility was allocated to the draw down and the remaining facility on a pro rata basis. Borrowing costs allocated to the actual draw down were presented as deductions of the loan carrying value. The borrowing costs are recognized over the lives of the term loans as interest expense, using the effective interest rate method. On December 21, 2017, the Group obtained a five-year credit facility of RMB220,000,000 from Bank C in PRC with a floating rate of 30% above PBOC benchmark interest rate. The credit facility is for working capital and is secured by Xin Run’s assets, while Mr. Wang Song and Ms. Kou Xiaohong, the Founders and ex-directors of the Company, take joint-and-several liability for the repayment of the loan. The Group paid RMB6,775,000 as borrowing cost to obtained the facility. On December 21, 2017, the first RMB40,000,000 was drawn down and used as working capital. On January 15, 2018, the second RMB50,000,000 (US$7,272,000) was drawn down and used as working capital. On May 14, 2018, the third RMB20,000,000 (US$2,909,000) was drawn down and used as working capital. On June 15, 2018, the fourth RMB90,000,000 (US$13,090,000) was drawn down and used as working capital. The borrowing cost paid for the facility was allocated to the draw down and the remaining facility on a pro rata basis. Borrowing cost allocated to the actual draw down was presented as deduction of the loan carrying value. The borrowing cost is recognized over the life of the term loan as interest expense using the effective interest rate method. The above loan from Bank B and C are secured by Xin Run's building and corresponding land use right in the net carrying value of RMB RMB449,254,000 as of December 31, 2017 and RMB 567,384,000 as of December 31, 2018. (see Note 7,9 and 11) On September 7, 2017, the Company obtained a three-year borrowing of RMB38,784,000 from financial institution A in the PRC, at 4.900% per annum. The borrowing is secured by Xin Run’s assets. The Company paid RMB1,000,000 as borrowing cost recognized over the borrowing term as interest expense using the effective interest rate method. The loan was fully repaid in 2018. Future installment payment schedule according to the borrowing agreements are as follows: December 31, 2018 RMB’000 US$’000 2019 80,000 11,636 2020 200,000 29,089 2021 80,000 11,636 2022 20,000 2,909 Total 380,000 55,270 As the Group failed to repay the loan installment according to the payment schedule, and assets pledged were sealed up, both Bank B and C required the Group to repay the remaining loan (Note 27) on October 28 and October 30, 2019, respectively. The Group was still in the progress negotiating with Bank B and C for new payment schedule. |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 12 Months Ended |
Dec. 31, 2018 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 14. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consisted of the following: December 31, 2017 2018 RMB’000 RMB’000 US$’000 Advance from customers 10,361 18,598 2,705 Other accrued expenses 26,876 21,764 3,164 Other tax payables 2,045 7,272 1,058 39,282 47,634 6,927 Other accrued expenses represent accrue rental and overdue penalty interest (see Note 27). |
OTHER PAYABLES
OTHER PAYABLES | 12 Months Ended |
Dec. 31, 2018 | |
OTHER PAYABLES | |
OTHER PAYABLES | 15. OTHER PAYABLES Other payables consisted of the following: December 31, 2017 2018 RMB’000 RMB’000 US$’000 Payables for purchase of property and equipment 257,375 393,287 57,202 Consideration received for disposal of Zhao Du and Shuo Ge (Note 10) 997,000 997,000 145,008 Other Payables — 13,567 1,974 1,254,375 1,403,854 204,184 |
DEFERRED GOVERNMENT GRANT
DEFERRED GOVERNMENT GRANT | 12 Months Ended |
Dec. 31, 2018 | |
DEFERRED GOVERNMENT GRANT | |
DEFERRED GOVERNMENT GRANT | 16. DEFERRED GOVERNMENT GRANT The following table presents the Group's deferred government grant as of the respective balance sheet dates: December 31, 2017 2018 RMB’000 RMB’000 US$’000 Beginning balance 24,208 19,580 2,848 Received during the year — — — Recognized as income during the year (4,628) (3,534) (514) Total balance of deferred government grant 19,580 16,046 2,334 Less: current portion 13,000 1,696 247 Balance of non-current deferred government grant 6,580 14,350 2,087 During the years ended December 31, 2016, 2017 and 2018, a certain government grants complied with the attached conditions. Hence, relevant government grants of RMB12,041,000, RMB4,628,000 and RMB3,534,000 (US$514,000) respectively, were recognized in the consolidated statements of comprehensive loss in other operating income during the years ended December 31, 2016, 2017 and 2018, respectively. |
CAPITAL LEASE OBLIGATIONS
CAPITAL LEASE OBLIGATIONS | 12 Months Ended |
Dec. 31, 2018 | |
CAPITAL LEASE OBLIGATIONS | |
CAPITAL LEASE OBLIGATIONS | 17. CAPITAL LEASE OBLIGATIONS Certain computer equipment and optical fibers were acquired through capital leases entered into by the Group. Future minimum lease payments under non-cancellable capital lease arrangements are as follows: December 31, 2017 2018 RMB’000 RMB’000 US$’000 2018 43,587 — — 2019 1,439 25,311 3,681 2020 — 24,003 3,491 2021 — 21,503 3,127 Total minimum lease payment 45,026 70,817 10,299 Less: amount representing interest (870) (9,159) (1,332) Present value of remaining minimum lease payment 44,156 61,658 8,967 Less: current portion 42,735 20,299 2,952 Non current portion 1,421 41,359 6,015 |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2018 | |
SHARE-BASED COMPENSATION | |
SHARE-BASED COMPENSATION | 18. SHARE-BASED COMPENSATION In order to attract and retain the best available personnel, provide additional incentives to employees, directors and consultants and promote the success of the Group's business, the Group adopted a stock option plan in 2007 (the “2007 Plan”). Under the 2007 Plan, the Group may grant options to its employees, directors and consultants to purchase an aggregate of no more than 14,000,000 ordinary shares of the Group, subject to different vesting requirements. The 2007 Plan was approved by the Board of Directors and shareholders of the Group on October 16, 2008. On May 28, 2009, the Group adopted a new stock option plan (the “2008 Plan”) which allows the Group to grant options to its employees, directors and consultants to purchase an aggregate of no more than 8,600,000 ordinary shares of the Group, subject to different vesting requirements. On May 20, 2010, the Group adopted a new stock option plan (the “2010 Plan”) which allows the Group to grant options to its employees, directors and consultants to purchase an aggregate of no more than 9,000,000 ordinary shares of the Group, subject to different vesting requirements. On June 20, 2011, the Group adopted a new stock option plan (the “2011 Plan”) which allows the Group to grant options to its employees, directors and consultants to purchase an aggregate of no more than 22,000,000 ordinary shares of the Group, subject to different vesting requirements. On July 2, 2012, the Group approved amendments to the 2011 Plan which provide, in effect, that the maximum aggregate number of ordinary shares that may be issued pursuant to all awards (the “Award Pool”) under the 2011 Plan shall be equal to five percent of the total issued and outstanding ordinary shares as of July 2, 2012; provided that, the ordinary shares reserved in the Award Pool shall be increased automatically if and whenever the unissued ordinary shares reserved in the Award Pool accounts for less than one percent of the total then issued and outstanding ordinary shares, as a result of which increase the unused ordinary shares reserved in the Award Pool immediately after each such increase shall equal to five percent of the then issued and outstanding ordinary shares. The 2007 Plan, 2008 Plan, 2010 Plan and 2011 Plan (collectively, the “Option Plans”) will be administered by the Compensation Committee as set forth in the Option Plans (the “Plan Administrator”). The board of directors of a committee designated by the board will administer the plan to execute option agreements with those persons selected by the Plan Administrator and issue ordinary shares of the Group upon exercise of any options so granted pursuant to the terms of an option agreement. The 2007 and 2008 Option Plans contain the same terms and conditions. All options granted under the 2007 and 2008 Option Plans have a term of nine years from the option grant date and have two different vesting schedules: 1) vest 100% on the stated vesting commencement date in the grantee’s option agreement; or 2) vest 50% on the second anniversary of the stated vesting commencement date and 25% on the third and fourth anniversaries of the stated vesting commencement date. All options granted under the 2010 Option Plan have a term of seven to ten years from the option grant date and have three different vesting schedules: 1) vest 100% on the stated vesting commencement date in the grantee’s option agreement; 2) vest 25% on the first, second, third and fourth anniversaries of the stated vesting commencement date; or 3) vest 25% on the first anniversary of the stated vesting commencement date and 6.25% every quarter for each of the second, third and fourth anniversaries of the stated vesting commencement date. All options granted under the 2011 Option Plan have a term of six to ten years from the option grant date and have four different vesting schedules: 1) vest 100% on the stated vesting commencement date in the grantee’s option agreement; or 2) vest 25% on the first, second, third and fourth anniversaries of the stated vesting commencement date; or 3) vest 25% on the first anniversary of the stated vesting commencement date and 6.25% every quarter for each of the second, third and fourth anniversaries of the stated vesting commencement date; or 4) vest one-third on the first, second and third anniversaries of the stated vesting commencement date. During the years ended December 31, 2016, 2017 and 2018, the Group granted nil, 15,080,000 and 17,600,000 options, respectively, to a combination of employees and directors of the Group at exercise prices ranging from US$0.06 to US$0.07. As of December 31, 2018, options to purchase 37,369,229 of ordinary shares were outstanding and options to purchase 16,222,688 ordinary shares were available for future grant under the Option Plans. The binomial option pricing model was applied in determining the estimated fair value of the options granted to employees and non-employees. The model requires the input of highly subjective assumptions including the estimated expected stock price volatility, the expected price multiple at which employees are likely to exercise share options. For expected volatilities, the Group has made reference to the historical price volatilities of ordinary shares of several comparable companies in the same industry as the Group. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury Bills yield in effect at the time of grant. (a) Options Granted to Employees The following table summarized the Group's employee share option activity under the Option Plans: Weighted Weighted average average remaining Aggregate Number of Exercise contractual intrinsic options price term value (US$) (Years) (US$’000) Outstanding, January 1, 2017 10,938,077 0.25 4.59 76 Vested and expected to vest at January 1, 2017 10,938,077 0.25 4.59 76 Granted 15,080,000 0.07 — — Forfeited (904,720) 0.27 — — Outstanding, December 31, 2017 25,113,357 0.14 7.26 586 Vested and expected to vest at December 31, 2017 25,113,357 0.14 7.26 586 Exercisable at December 31, 2017 16,918,975 0.22 6.14 312 Granted 17,600,000 0.06 — — Exercised (1,096,896) 0.08 — — Forfeited (4,247,232) 0.06 — — Outstanding, December 31, 2018 37,369,229 0.11 7.81 2 Vested and expected to vest at December 31, 2018 37,369,229 0.11 7.81 2 Exercisable at December 31, 2018 16,222,688 0.17 5.93 2 The aggregated intrinsic value of share options outstanding and exercisable at December 31, 2018 was calculated based on the closing price of the Group's ordinary shares on December 31, 2018 of US$1.06 per ADS (equivalent to US$0.07 per ordinary share). The total intrinsic value of share options exercised during the years ended December 31, 2016, 2017 and 2018 was RMB3,132,000, nil and RMB502,000, respectively. As of December 31, 2018, there was RMB2,849,000 (US$414,000) of unrecognized share-based compensation cost related to share options issued to employees, which are expected to be recognized following the graded vesting method over the remaining vesting periods of different tranches, ranging from 2 years to 4 years. The Group calculated the estimated fair value of the options granted in 2018 using the binomial option pricing model with the following assumptions: 2018 Suboptimal exercise factor 2.2-2.8 Risk-free interest rates 2.78 % Expected volatility 88 % Expected dividend yield 0 % Weighted average fair value of share option 0.0469 The total fair value of options vested during the years ended December 31, 2016, 2017 and 2018 was RMB590,000, RMB2,054,000, and RMB 4,013,000 (US$584,000), respectively. (b) Restricted Share Units Award Granted to Employees On December 23, 2014, the Group issued 11,265,520 units of restricted share units to the employees and directors under the 2011 Plan. The restricted share units shall become vested in each year of 2014, 2015, 2016 and 2017, respectively. On December 11, 2015, the Group issued 40,106,656 units of restricted share units to the employees and directors under the 2011 Plan. The restricted share units shall become vested in each year of 2016, 2017 and 2018, respectively. On December 13, 2017, the Group issued 16,813,344 units of restricted share units to the employees and directors under the 2011 Plan. The restricted share units shall become vested in each year of 2018, 2019 and 2020, respectively. On April 9, 2018, the Group issued 480,000 units of restricted share units to the employees and directors under the 2011 Plan. The restricted share units shall become vested in each year of 2018, 2019 and 2020, respectively. As of December 31, 2018, there was RMB300,000 (US$44,000) of unrecognized share-based compensation cost, related to unvested restricted share units which is expected to be recognized over a weighted-average period of 2 years. The following table summarized the Group's restricted shares award issued under the 2011 Plan: Number of Weighted average grant ordinary shares date fair value (US$) Outstanding, January 1, 2017 7,901,127 0.46 Expected to vest at January 1, 2017 7,901,127 0.46 Granted 16,813,344 0.07 Vested (20,555,835) 0.16 Forfeited (1,935,168) 0.45 Outstanding, December 31, 2017 2,223,468 0.14 Expected to vest at December 31, 2017 2,223,468 0.14 Granted 480,000 0.07 Vested (1,503,212) 0.35 Forfeited (560,256) 0.43 Outstanding, December 31, 2018 640,000 0.07 Expected to vest at December 31, 2018 640,000 0.07 The cost of the restricted share units is determined using the fair value (determined based on the fair market value of the Group's ordinary shares on the grant date, or if the grant date is not a trading day then the immediately preceding trading date), net of expected forfeitures. The aggregate fair value of the unvested restricted share units for the years ended December 31, 2017 and 2018 was RMB1,187,448(US$183,000) and RMB300,000 (US$44,000), respectively. The total fair value of restricted share units vested during the years ended December 31, 2016, 2017 and 2018 was RMB84,435,000, RMB8,882,000 and RMB144,000 (US$21,000), respectively. (c) Options Granted to Non-employees The aggregated intrinsic value of share options outstanding and exercisable at December 31, 2018 was calculated based on the closing price of the Group's ordinary shares on December 31, 2018 of US$1.06 per ADS (equivalent to US$0.07 per ordinary share). As of December 31, 2018, the Company had options issued to non-employees outstanding to purchase an aggregate of nil shares with an exercise price below the closing price of the Company’s ordinary shares on December 31, 2018, resulting in an aggregate intrinsic value of nil. On December 31, 2016, the Group granted restricted share units of 454,912 shares to a former employee, which were immediately vested. The fair market value of the Group's ordinary shares on the grant date of RMB1,320,000(US$194,000) was recorded in the “general and administrative expense” in the consolidated statement of comprehensive loss. A total compensation expense relating to all options and restricted share units recognized for the years ended December 31, 2016, 2017 and 2018 is as follows: For the years ended December 31, 2016 2017 2018 (RMB)’000 (RMB)’000 (RMB)’000 (US$)’000 Cost of revenues 5,961 490 Sales and marketing expenses 2,753 254 General and administration expenses 72,483 9,630 Research and development expenses 3,828 562 85,025 10,936 |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME | 12 Months Ended |
Dec. 31, 2018 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME | |
ACCUMULATED OTHER COMPREHENSIVE INCOME | 19. ACCUMULATED OTHER COMPREHENSIVE INCOME The movement of accumulated other comprehensive income is as follows: Unrealized/ (realized) holding gain Foreign on available- currency for-sale translation investments Total Note RMB’000 RMB’000 RMB’000 Balance as of January 1, 2017 (189) 905 716 Other comprehensive (loss)/income before reclassification 2,748 (4,195) (1,447) Amounts reclassified from accumulated other comprehensive income — 3,290 3,290 Balance as of December 31, 2017 2,559 — 2,559 Other comprehensive income/(loss) before reclassification (1,037) — (1,037) Amounts reclassified from accumulated other comprehensive income — — — Balance as of December 31, 2018 1,522 — 1,522 Balance as of December 31, 2018, in US$ 221 — 221 |
MAINLAND CHINA EMPLOYEE CONTRIB
MAINLAND CHINA EMPLOYEE CONTRIBUTION PLAN | 12 Months Ended |
Dec. 31, 2018 | |
MAINLAND CHINA EMPLOYEE CONTRIBUTION PLAN | |
MAINLAND CHINA EMPLOYEE CONTRIBUTION PLAN | 20. MAINLAND CHINA EMPLOYEE CONTRIBUTION PLAN As stipulated by the regulations of the PRC, full-time employees of the Group in the PRC participate in a government-mandated multiemployer defined contribution plan organized by municipal and provincial governments. Under the plan, certain pension benefits, medical care, unemployment insurance, employee housing fund and other welfare benefits are provided to employees. The Group is required to make contributions to the plan based on certain percentages of employees’ salaries. The total expenses for the plan were RMB53,669,000, RMB44,416,000 and RMB29,288,000 (US$4,260,000) for the years ended December 31, 2016, 2017 and 2018, respectively. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2018 | |
INCOME TAXES | |
INCOME TAXES | 21. INCOME TAXES Enterprise income tax Cayman Islands The Company is a tax exempt company incorporated in the Cayman Islands and conducts substantially all of its business through its subsidiaries and VIEs. United States of America ChinaCache North America, Inc. and CCAL was registered in California, United States of America in 2007 and 2016 respectively. For the years ended December 31, 2016, 2017 and 2018, the entity is subject to both California State Income Tax (8.84%) and Federal Income Tax (graduated income tax rate up to 34%, 34% and a flat 21% respectively) on its taxable income under the current laws of the state of California and United States of America. Hong Kong The two-tier profits tax rates system was introduced under the Inland Revenue (Amendment)(No.3) Ordinance 2018 ("the Ordinance") of Hong Kong became effective for the assessment year 2018/2019. Under the two-tier profit tax rates regime, the profits tax rate for the first HKD 2 million of assessable profits of a corporation will be subject to the lowered tax rate, 8.25% while the remaining assessable profits will be subject to the legacy tax rate, 16.5%. ChinaCache Networks (Hong Kong) Limited, the Company’s wholly owned subsidiary incorporated in Hong Kong, is subject to Hong Kong corporate income tax at a rate of 16.5% on the estimated assessable profits arising in Hong Kong for the years ended December 31, 2016 and 2017, and 8.25% for the years ended December 31, 2018. The PRC The Company’s subsidiaries and the VIEs that are each incorporated in the PRC are subject to Corporate Income Tax (“CIT”) on the taxable income as reported in their respective statutory financial statements adjusted in accordance with the new PRC Enterprise Income Tax Laws (“PRC Income Tax Laws”) effective from January 1, 2008. Pursuant to the PRC Income Tax Laws, the Company’s PRC subsidiaries and the VIEs are subject to a CIT statutory rate of 25%. Under the PRC Income Tax Laws, an enterprise which qualifies as a High and New Technology Enterprise (“the HNTE”) is entitled to a preferential tax rate of 15% provided it continues to meet HNTE qualification standards on an annual basis. ChinaCache Beijing qualifies as an HNTE and is entitled for a preferential tax rate of 15% from 2016 to 2021 if it continues to qualify on an annual basis. The HNTE certificate of ChinaCache Beijing is expiring in 2022 and there exist uncertainties with the reapplication outcome. Beijing Blue IT qualifies as an HNTE and is entitled for a preferential tax rate of 15% from 2016 to 2020 if it continues to qualify on an annual basis. The HNTE certificate of ChinaCache Blue IT is expiring in 2021 and there exist uncertainties with the reapplication outcome. In accordance with the PRC Income Tax Laws, enterprises established under the laws of foreign countries or regions but whose “place of effective management” is located within the PRC are considered PRC tax resident enterprises and subject to PRC income tax at the rate of 25% on worldwide income. The definition of “place of effective management” refers to an establishment that exercises, in substance, overall management and control over the production and business, personnel, accounting, properties, etc. of an enterprise. As of December 31, 2018, no applicable detailed interpretation or guidance has been issued to define “place of effective management”. Furthermore, as of December 31, 2018, the administrative practice associated with interpreting and applying the concept of “place of effective management” is unclear. Based on the assessment of facts and circumstances available at December 31, 2018, management believes none of its non-PRC entities are more likely than not PRC tax resident enterprises. It is possible the assessment of tax residency status may change in the next twelve months, pending announcement of new PRC tax rules in the future. The Group will continue to monitor its tax status. Loss before income tax expense consists of: For the years ended December 31, 2016 2017 2018 RMB’000 RMB’000 RMB’000 US$’000 Non-PRC (128,184) (36,317) 21,495 3,128 PRC (781,840) (275,201) (47,297) (6,880) (910,024) (311,518) (25,802) (3,752) The income tax expense comprises of: For the years ended December 31, 2016 2017 2018 RMB’000 RMB’000 RMB’000 US$’000 Current 1,104 29,428 11 2 Deferred 3,125 30,220 — — 4,229 59,648 11 2 A reconciliation of the differences between the income tax calculated using statutory tax rate and the effective tax rate for the year ended December 31, 2016, 2017 and 2018 is as follows: For the years ended December 31, 2016 2017 2018 RMB’000 RMB’000 RMB’000 US$’000 Loss before income tax expense (910,024) (311,518) (25,802) (3,752) Income tax computed at PRC statutory tax rate of 25% (227,506) (77,881) (6,450) (938) Preferential tax rates 68,685 15,955 (7,031) (1,023) International rate differences 22,365 9,401 (4,732) (688) Additional 50%/75% tax deduction for qualified research and development expenses (9,915) (8,795) (7,228) (1,051) Non-deductible expenses 2,043 6,187 3,002 437 Effect of changes in tax rates on deferred taxes (61,978) (33,930) 101,502 14,763 Changes in the valuation allowance 210,535 148,711 (79,052) (11,498) Income tax expense 4,229 59,648 11 2 The components of deferred taxes are as follows: For the years ended December 31, 2017 2018 (RMB’000) (RMB’000) (US$’000) Deferred tax assets: - Allowance for doubtful accounts 19,553 12,323 1,792 - Deferred revenue 4,895 2,407 350 - Accruals 25,256 25,993 3,781 - Tax losses 159,782 134,855 19,613 - Property and equipment 3,424 2,105 306 - Intangible assets 2,001 1,469 214 - Long-term investment impairment 1,500 960 140 - Impairment loss for long-lived assets 68,508 24,663 3,587 - Unrealized profit 71,760 71,868 10,453 Less: valuation allowance (356,679) (276,643) (40,236) Total Deferred tax assets — — — Valuation allowances have been provided where, based on all available evidence, management determined that deferred tax assets are not more likely than not to be realizable in future years. The net valuation allowance increased by RMB148,711,000 and decreased by RMB79,052,000 during the years ended December 31, 2017 and 2018, respectively. As of December 31, 2018, the Group has net operating tax losses carried forward from its PRC subsidiaries of RMB804,755,000, which will expire between 2019 and 2023. As of December 31, 2018, the Group has net operating tax losses carried forward from its non-PRC subsidiaries of RMB17,663,000 available to offset future taxable income. Unrecognized Tax Expense A roll-forward of accrued unrecognized tax expense is as follows: December 31, 2017 2018 RMB’000 RMB’000 US$’000 Beginning balance (8,273) (8,273) (1,203) Increase based on tax positions related to the current year — — — Ending balance (8,273) (8,273) (1,203) The unrecognized tax expense is mainly related to under-reported income and transfer pricing for certain subsidiaries and VIEs. The amount of unrecognized tax expense will change in the next 12 months, pending clarification of current tax law or audit by the tax authorities, however, an estimate of the range of the possible change cannot be made at this time. For the years ended December 31, 2017 and 2018, there’s no unrecognized tax expense, if ultimately recognized, will impact the effective tax rate. The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. During the years ended December 31, 2016, 2017, and 2018, the Company recognized approximately RMB 1,510,000, RMB 1,510,000, and RMB 1,510,000 in interest and penalties. The Company had approximately RMB 12,221,000 and RMB 13,731,000 for the payment of interest and penalties accrued at December 31, 2017 and 2018, respectively. In accordance with PRC Tax Administration Law on the Levying and Collection of Taxes, the PRC tax authorities generally have up to five years to assess underpaid tax plus penalties and interest for PRC entities’ tax filings. In the case of tax evasion, which is not clearly defined in the law, there is no limitation on the tax years open for investigation. Accordingly, the PRC entities remain subject to examination by the tax authorities based on the above. |
RELATED PARTY BALANCES AND TRAN
RELATED PARTY BALANCES AND TRANSACTIONS | 12 Months Ended |
Dec. 31, 2018 | |
RELATED PARTY BALANCES AND TRANSACTIONS | |
RELATED PARTY BALANCES AND TRANSACTIONS | 22. RELATED PARTY BALANCES AND TRANSACTIONS In addition to the information disclosed elsewhere in the financial statements, the principal related parties with which the Group had transactions during the years presented are as follows: Name of Related Parties Relationship with the Company Mr. Wang Song The Co-Founder and Ex-director of the Company Ms. Kou Xiaohong The Co-Founder and Ex-director of the Company Subsequently on May 17, 2019 and June 5, 2019, Mr. Song Wang tendered his resignation as the Company's Chief Executive Officer and the Board as Directors, respectively. The Co-founder and director Ms. Xiaohong Kong resigned from the management team and the Board on August 15, 2019. Guarantee provided by related parties to the Group Mr. Wang Song and Ms. Kou Xiaohong provided guarantee for all the bank borrowing from Bank B and Bank C during the year ended December 31, 2017 (Note 13) Mr. Wang Song provided guarantee for the short term borrowing from a third-party A in PRC with the amount of RMB 12,350,000 during the year ended December 31, 2018. (Note 13) Mr. Wang Song provided guarantee for the capital lease from vendor A with the amount of RMB 39,000,000 during the year ended December 31, 2018. Mr. Wang Song and Ms. Kou Xiaohong provided guarantee for the capital lease from vendor B with the amount of RMB 25,000,000 during the year ended December 31, 2018. The Group had the following related party balances as of December 31, 2018 and related party transactions during the year then ended: Mr. Wang Ms. Kou Song Xiaohong Total Balance as of January 1, 2016, and December 31 2016, 2017 — (18) (18) Expense paid on behalf of the Group (328) — (328) Expense Reimbursement payment 277 — 277 Balance as of December 31, 2018 (51) (18) (69) Balance as of December 31, 2018 (US$’000) (7) (3) (10) In March 2017, the Group entered into a set of definitive agreements for Xin Run, pursuant to which Tianjin Shuishan, Shanghai Qiaoyong and Tianjin Dingsheng will purchase 47.7%, 26.3% and 5.0%, respectively of the equity interest in Xin Run for a consideration of RMB133.5 million, RMB73.7 million and RMB14.0 million, respectively. Tianjin Shuishan is owned by Mr. Wang Song and Ms. Kou Xiaohong. On December 28, 2017, the board approved to terminate the transfer. On March 23, 2018, the Group entered into a termination agreement with relevant parties and terminated the equity transfer of Xin Run. |
RESTRICTED NET ASSETS
RESTRICTED NET ASSETS | 12 Months Ended |
Dec. 31, 2018 | |
RESTRICTED NET ASSETS | |
RESTRICTED NET ASSETS | 23. RESTRICTED NET ASSETS The Company’s ability to pay dividends is primarily dependent on the Company receiving distributions of funds from its subsidiaries. Relevant PRC statutory laws and regulations permit payments of dividends by the Company’s PRC subsidiaries only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. The results of operations reflected in the consolidated financial statements prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of the Company’s subsidiaries. In accordance with the PRC Regulations on Enterprises with Foreign Investment and the articles of association of the Company’s PRC subsidiaries, a foreign-invested enterprise established in the PRC is required to provide certain statutory reserves, namely general reserve fund, the enterprise expansion fund and staff welfare and bonus fund which are appropriated from net profit as reported in the enterprise’s PRC statutory accounts. A foreign-invested enterprise is required to allocate at least 10% of its annual after-tax profit to the general reserve until such reserve has reached 50% of its respective registered capital based on the enterprise’s PRC statutory accounts. Appropriations to the enterprise expansion fund and staff welfare and bonus fund are at the discretion of the board of directors for all foreign-invested enterprises. The aforementioned reserves can only be used for specific purposes and are not distributable as cash dividends. ChinaCache Beijing was established as a foreign-invested enterprise and, therefore, is subject to the above mandated restrictions on distributable profits. As of December 31, 2017, and 2018, the Group had appropriated RMB1,326,000 and RMB1,326,000 (US$193,000), respectively in its statutory reserves. Foreign exchange and other regulations in the PRC may further restrict the Company’s PRC subsidiaries and VIEs from transferring funds to the Company in the form of dividends, loans and advances. Amounts restricted include paid-in capital and statutory reserves of the Company’s PRC Subsidiaries and the equity of VIEs, as determined pursuant to PRC generally accepted accounting principles. As of December 31, 2018, restricted net assets of the Company’s PRC subsidiaries and VIEs were RMB471,213,000 (US$68,535,000). |
LOSS PER SHARE
LOSS PER SHARE | 12 Months Ended |
Dec. 31, 2018 | |
LOSS PER SHARE | |
LOSS PER SHARE | 24. LOSS PER SHARE Basic and diluted loss per share for each of the periods presented are calculated as follows: For the Year Ended December 31, 2016 2017 2018 (RMB’000) (RMB’000) (RMB’000) (US$’000) Numerator: Net loss attributable to ordinary shareholders: (913,477) (369,161) (24,418) (3,551) Denominator: Number of shares outstanding, opening 400,165,607 421,522,374 425,150,082 425,150,082 Weighted average number of shares issued 20,702,130 4,067,372 1,659,485 1,659,485 Weighted average number of shares repurchased (12,678,015) — — — Weighted-average number of shares outstanding – Basic and diluted 408,189,722 425,589,746 426,809,567 426,809,567 Loss per share -Basic and diluted (2.24) (0.87) (0.06) (0.01) The effects of share options have been excluded from the computation of diluted loss per share for the years ended December 31, 2016, 2017 and 2018 as their effects would be anti-dilutive. During the years ended December 2016, 2017 and 2018, the Company issued 23,000,000, nil and nil treasury stock to its share depositary bank which will be used to settle share option awards upon their exercise. No consideration was received by the Company for this issuance of ordinary shares. These ordinary shares are legally issued and outstanding but are treated as escrowed shares for accounting purposes and therefore, have been excluded from the computation of loss per share. Any ordinary shares not used in the settlement of share option awards will be returned to the Company. During 2018, treasury stock was used to settle 1,096,896 units of share options and 2,040,736 units of restricted share units vested (2017: exercise of restricted share units vested 3,627,709, 2016: exercise of share options 1,325,241 and restricted share units vested 33,762,181). |
FAIR VALUE MEASUREMENT
FAIR VALUE MEASUREMENT | 12 Months Ended |
Dec. 31, 2018 | |
FAIR VALUE MEASUREMENT | |
FAIR VALUE MEASUREMENT | 25. FAIR VALUE MEASUREMENT The Group applies ASC topic 820, “ Fair Value Measurements and Disclosures” . ASC 820 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. ASC 820 requires disclosures to be provided on fair value measurement. ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1 – Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 – Include other inputs that are directly or indirectly observable in the marketplace. Level 3 – Unobservable inputs which are supported by little or no market activity. ASC 820 describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset. In accordance with ASC 820, the available-for-sale investment of the mutual fund is classified within Level 1 as the Company measures the fair value using quoted trading prices that are published on a regular basis. The available-for-sale investment in convertible loan of investee D is classified within Level 3 and determined based on option pricing model using the discount curve of market interest rates. The fair value of the investment was determined by management with the assistance of an independent third-party valuation firm. Investment in the Investee D RMB’000 Fair value at January 1, and December 31, 2016 3,973 Other than temporary impairment (3,973) Fair value at December 31, 2017 and 2018 — Fair value at December 31, 2018 (US$’000) — The Group's valuation techniques used to measure the fair value was derived from management’s assumptions of estimations. Changes in the fair value of the available-for-sale investment will be recorded in other comprehensive income/(loss). |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2018 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 26. COMMITMENTS AND CONTINGENCIES (a) Operating Leases The Group leases facilities in the PRC under non-cancelable operating leases expiring on different dates. Total rental expense under all operating leases was RMB22,846,000, RMB23,401,000 and RMB16,997,000 (US$2,472,000) for the years ended December 31, 2016, 2017 and 2018, respectively. As of December 31, 2018, the Group had future minimum lease payments under non-cancelable operating leases with initial terms of one-year or more in relation to office premises consist of the following: December 31, 2018 RMB’000 US$’000 2019 13,099 1,905 2020 5,982 870 2021 1,082 157 2022 1,114 162 2023 1,147 167 2024 1,886 274 24,310 3,535 (b) Purchase Commitments As of December 31, 2018, the Group had outstanding purchase commitments in relation to bandwidth and cloud infrastructure of RMB336,783,000 (US$48,983,000). (c) Contingencies In August 2017, a subsidiary of the Company, Xin Run, initiated a lawsuit against BFSMC in Beijing, arising out of the sales of data center buildings. Xin Run sought the payment of purchase price in the amount of RMB105.6 million and the relating interest. In September 2017, BFSMC filed the statement of defense and made a counterclaim, claiming, among others, the late delivery penalties and relating losses in the total amount of approximately RMB50.5 million. Thereafter Xin Run filed a motion to dismiss BFSMC’s counterclaim arguing that the court does not have the jurisdiction. In April 2018, Xin Run were notified by the court that its motion was dismissed and as a result, the lawsuit is currently pending. In addition, Xin Run's bank deposits and other assets in a total amount of approximately RMB50.5 million were sealed up, distrained or frozen by the court. On April 24, 2018, Xin Run amended its claim requesting, among other things, the defendant pay the additional purchase price of RMB96 million, damages for breach of contract in an amount of RMB14.4 million and the relating interest of RMB8.86 million. Management is of the view that these proceedings are still pending, therefore it is impossible at this stage to properly evaluate the outcome. Therefore, no provision has been made for this case. In October 2017, a subsidiary of BFSMC filed a lawsuit against Xin Run in the Shunyi District Court of Beijing requesting Xin Run pay overdue rent and the relating interest. At present, the second instance of this case has been completed. The court has sentenced in support of the plaintiff that Xin Run should pay overdue rent from October 2017 to June 2018 in an amount equal to RMB64.8 million and the relevant interest thereon. The subsidiary of BFSMC has applied to the competent court for compulsory execution of the court decision. Liability equal to the sentenced amount has been recorded in the balance sheet as of December 31, 2018 under other payables to offset consideration received for disposal of Zhao Du and Shuo Ge in the expectation to net settle with BFSMC. (See note 27) |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 12 Months Ended |
Dec. 31, 2018 | |
SUBSEQUENT EVENT | |
SUBSEQUENT EVENT | 27. SUBSEQUENT EVENT In addition to the information disclosed elsewhere in the financial statements, there are the following subsequent events: On April 3, 2019, after the renegotiation with the buyer, the consideration for the transaction of disposal Shuo Ge discussed in Note 10 was changed to RMB 251.8 million and the Group should return the RMB 73.2 million and its related interest of RMB 13.0 million within six years, from January 1, 2019 to Dec 31, 2024. And the Group has reached an exclusive lease-back agreement with this third party to obtain the exclusive lease-back operation right for the building in the next five years at a total cost of RMB173.1 million. On May 17, 2019, the Group received a notice from a government prosecutors’ office in Beijing that the Group was currently under investigation for allegations of enterprise bribery. The Group has engaged a criminal defense counsel to prepare for the relevant legal proceedings. By that date, Mr. Song Wang had been arrested and was also currently under investigation for the allegations of enterprise bribery against the Group. Mr. Song Wang tendered his resignation as the Company’s Chief Executive Officer to the Board on May 17, 2019, then the Board has appointed Mr. Bin Liu as the Company’s Acting Chief Executive Officer. As the legal proceedings are still at a relatively early stage, the Company is currently unable to assess the likely outcomes of such proceedings. Therefore, no provision has been made for this case. On May 20, 2019 the Company received a notification letter (the “Notification Letter”) from The Nasdaq Stock Market, Inc. (the “NASDAQ”) indicating that the Company is not in compliance with Nasdaq Listing Rule 5250(c)(1) because it did not timely file its annual report on Form 20-F for the fiscal year ended December 31, 2018 (“2018 Form 20-F”) with the Securities and Exchange Commission (the “SEC”). The Notification Letter also contains questions (the “Questions”) relating to the Company’s disclosure of certain recent events (“Recent Disclosure”), including (i) Grant Thornton China’s resignation as the Company’s independent auditor, (ii) the Company’s engagement with Michael T. Studer CPA P.C. as independent auditor to the Company and (iii) allegations of enterprise bribery against the Company as well as Mr. Song Wang, the Company’s Chairman and former Chief Executive Officer. The Notification Letter states that in light of the Company’s Recent Disclosure, the staff of NASDAQ has determined to apply more stringent criteria and shorten the time period for the Company to submit its plan to regain compliance (the “Plan”). The Notification Letter further states that the Company must submit the Plan and its response to the Questions no later than May 31, 2019. On July 2, 2019 the Company received a notification letter (the “Notification Letter II”) from the NASDAQ that its American depositary shares would be delisted from the NASDAQ Stock Market. The Notification Letter II states that the Staff of NASDAQ has determined to deny the Company’s request for an extension of time to regain compliance with the filing requirement in NASDAQ Listing Rule 5250(c)(1). The Staff also cited two additional bases for delisting, which are (i) non-compliance with NASDAQ Listing Rule 52560(b)(1) due to the Company’s failure to timely disclose certain information regarding the arrest of the Company’s former chief executive officer Mr. Song Wang and the criminal investigation into the Company as well as (ii) public interest concerns pursuant to NASDAQ Listing Rule 5101 due to the failure of the Company’s senior management to promptly advise the Company’s board of directors of Mr. Wang’s arrest and the investigation of the Company. On September 4, 2019, Nasdaq issued a letter to the Company stating that The Nasdaq Hearings Panel (the “Panel”) has determined to delist the Company’s shares from The Nasdaq Stock Market. The delisting determination stated that Nasdaq will complete the delisting by filing a Form 25 with the SEC after applicable appeal periods have lapsed. Thereafter, the Company intends to work with a market maker to file a Form 211 with FINRA to enable the Company’s shares to begin trading on the over-the-counter markets. On September 9, 2019, the First Branch of Beijing People's Procurator has presented public prosecution to the First Intermediate People's Court of Beijing against the Group regarding the case of suspected company bribery. Management is of the view that these proceedings are at a preliminary stage, therefore it is impossible at this stage to properly evaluate the outcome. Therefore, no provision has been made for this case. On November 8, 2019, the Company received a notification that the Nasdaq has determined to remove from listing the American Depositary Shares of the Company, effective at the opening of the trading session on November 18, 2019. Based on review of information provided by the Company, Nasdaq Staff determined that the Company no longer qualified for listing on the Exchange pursuant to Listing Rules 5100, 5250(b)(1) and 5250(c)(1). The Company was notified of the Staffs determination on July 2, 2019. The Company appealed the determination to a Hearing Panel. Upon review of the information provided by the Company, the Panel issued a decision dated September 4, 2019, denying the Company continued listing and notified the Company that trading in the Company’s securities would be suspended on September 6, 2019. The Company did not request a review of the Panels decision by the Nasdaq Listing and Hearing Review Council. The Listing Council did not call the matter for review. The Panels Determination to delist the Company became final on October 21, 2019. In October 2019, Bank C sent notice of early maturity of loan to Xin Run and asked for the early repayment of bank loans amounted to RMB160 million and related unpaid interest. In December 2017, the two parties signed RMB220 million bank loan agreement with the term of five years (see Note 13). As of October 31, 2019, the balance of the borrowing was RMB160 million. As the buildings and land use right that pledged to the bank has been sealed up by the Shunyi District Court mainly due to the lawsuit with a subsidiary of BFSMC, the bank considered that Xin Run has defaulted and asked for the immediate repayment of the RMB160 million and related unpaid interest within three days. And Xin Run did not repay the bank loan yet. In October 2019, Bank B sent notice of early maturity of loan to Xin Run and asked for the early repayment of bank loans amounted to RMB 170 million and related unpaid interest immediately, as the buildings and land use right that pledged to Bank B has been sealed up by the court, the bank account in Bank B has been frozen, and Xin Run did not made repayment of loans according to the repayment plan, which violated the bank facility agreement. And Xin Run did not repay the bank loan yet. Other litigation issues The Company and certain of its current and former officers and directors have been named as defendants in a shareholder class action lawsuit filed in the U.S. District Court for the Central District of California (the “Central California District Court”): William Likas v. ChinaCache International Holdings Ltd. et al, Civil Action No. 2:2019-cv-06942 (C.D. Cal.) (filed on August 9, 2019). The action—purportedly brought on behalf of a class of persons who allegedly suffered damages as a result of their trading activities related to the Group’s ADSs from April 10, 2015 to May 17, 2019—alleges that certain of the Group’s public statements and filings contained materially false and misleading statements or omissions in violation of U.S. securities laws. On October 2, 2019, the Central California District Court appointed a group of two purported shareholders of the Company as the Lead Plaintiff of the class. On November 13, 2019, the Central California District Court entered an order to show cause, ordering the Lead Plaintiff to explain why this action should not be dismissed for lack of prosecution because the Lead Plaintiff had not filed a proof of service regarding any defendant. On November 20, 2019, the Lead Plaintiff submitted a response to the Court’s order to show cause and requested that the Court allow the Lead Plaintiff to serve the defendants through alternative means. The Court has not ruled on the Lead Plaintiff’s response or request for alternative service. Back on June 12, 2019, another plaintiff had filed a substantially identical putative shareholder class action lawsuit against the Group and certain of the Group’s current and former officers and directors in the U.S. District Court for the Southern District of New York. On August 30, 2019, the plaintiff voluntarily dismissed that lawsuit. In July 2017, a claim was raised by a construction company of the cloud infrastructure against Xin Run, for the alleged non-payment of construction fees of RMB73.9 million and the relating interest. In July 2019, this construction company and Xin Run reached an agreement under the mediation of the Court of Second Instance to settle this case. Xin Run should pay RMB33.7 million to this construction company. The Company has fully accrued the amount as liability accordingly. In August 2019, Xin Run repaid RMB10 million, but it did not repay the remaining balance subsequently. According to the agreement, if Xin Run does not settle the payment on time, it should be doubled the relating interest for the delaying days. In November 2019, the construction company has applied to the competent court for compulsory execution. In October 2017, a subsidiary of BFSMC filed a lawsuit against Xin Run in the Shunyi District Court of Beijing requesting Xin Run pay overdue rent and the relating interest from October 2017 to June 2018 with amount of RMB64.8 million. The court has sentenced in support of the plaintiff that Xin Run should pay overdue rent in an amount equal to RMB64.8 million and the relevant interest thereon. The subsidiary of BFSMC has applied to the competent court for compulsory execution of the court decision. Accordingly, the land use right and relevant buildings owned by Xin Run has been sealed up by the Shunyi District Court of Beijing. Liability equal to the sentenced amount has been recorded in the balance sheet as of December 31, 2018 under other payables to offset consideration received for disposal of Zhao Du and Shuo Ge in the expectation to net settle with BFSMC. In June 2019, the foregoing subsidiary of BFSMC filed another lawsuit against Xin Run in the Shunyi District Court of Beijing requesting Xin Run pay overdue rent from July 2018 to March 2019 with total amount of RMB64.8 million and the relating interest. Xin Run appealed to a higher court and the result is still pending. Management is of the view that these proceedings are at a preliminary stage, therefore, it is impossible at this stage to properly evaluate the outcome. Liability of the six-month rent in 2018 has been recorded in the balance sheet as of December 31, 2018 under other payables to offset consideration received for disposal of Zhao Du and Shuo Ge in the expectation to net settle with BFSMC. In April 2019, a trading company filed a lawsuit against Xin Run for the payment of equipment purchase price and related penalty in a total amount of approximately RMB37.2 million. In June 2019, the trading company and Xin Run reached an agreement under the mediation of the court. According to the agreement, Xin Run should pay RMB20.2 million and related interest of RMB6.0 million to the trading company. The Company has accrued the amount as other payables, Xin Run only settled RMB2.0 million subsequently. In April 2019, a technology company filed a lawsuit in Shanghai Minhang District People’s Court against Beijing Blue I.T., demanding payment of service fee and relevant liquidated damage in a total amount of approximately RMB28.3 million. The court rendered a judgment on the case on October 15, 2019, which ruled that Beijing Blue I.T. should pay relevant service fee, liquidated damage and costs of legal proceedings. Beijing Blue I.T. has appealed the judgment to higher court. Management is of the view that these proceedings are at a preliminary stage, therefore it is impossible at this stage to properly evaluate the outcome. The Company accrued the 2018 service fee, amounted to RMB18.7 million as liability in balance sheet for the year ended December 31, 2018. In June 2019, a computer company filed a lawsuit against Xin Run requesting for the payment of equipment purchase fee and its related interest in a total amount of RMB40.8 million. Thereafter Xin Run filed a motion to dismiss the company's counterclaim arguing that the court does not have the jurisdiction. In November 2019, the court made judgment and agreed to transfer the case to Chaoyang District Court of Beijing. In June 2019, the computer company also filed a lawsuit against Xin Run requesting for the payment of construction service fee and its related interest in a total amount of RMB58.1 million. In September 2019, the computer company altered its request for litigation with claiming extra construction fee with the amount of RMB16.5 million. Xin Run has appealed the judgment to a higher court. Management is of the view that these proceedings are at preliminary stages, and it is impossible at this stage to properly evaluate the outcome. However, the Company has accrued most of the amount as other payables. In August 2019, a building materials technology company initiated a lawsuit against Xin Run in the Beijing Shunyi District People’s Court to request payment of approximately RMB35.6 million that should be paid by Xin Run to a third party, as such third party was obligated to pay the same amount to the building materials technology company, and the relating cost of the lawsuit. Xin Run filed a motion to dismiss the case for lack of jurisdiction, which was granted by the court and as a result, this lawsuit is still pending. Management is of the view that these proceedings are at a preliminary stage, therefore it is impossible at this stage to properly evaluate the outcome. However, the amount has been accrued as other payables. In October 2019, another technology company filed a lawsuit against Xin Run in the Beijing Shunyi District People’s Court, requesting Xin Run to pay overdue construction fees and liquidated damage in a total amount of approximately RMB20.5 million. Xin Run filed a motion to dismiss for lack of jurisdiction. However, Xin Run were notified by the court that its motion was rejected and certain real-property of Xin Run was sealed up by the court. As of the date hereof, this lawsuit is still pending. Management is of the view that these proceedings are at a preliminary stage, therefore it is impossible at this stage to properly predict the result and potential financial impact of this pending claim, if any. However, the Company has accrued the amount as other payables. In November 2019, bank B filed a lawsuit with respect to financial loan agreement dispute against Xin Run, Mr. Song Wang and Ms. Jean Xiaohong Kou in the Fushun Intermediate People's Court of Liaoning Province. As of the date hereof, the Group has not received the any documents relating to this lawsuit from the court. In addition, according to court decisions issued in certain legal proceedings, an aggregate amount of RMB12.0 million and RMB4.3 million in bank accounts of Beijing Blue I.T. and Xin Run, is currently frozen and restricted to be used, respectively. |
CONDENSED FINANCIAL INFORMATION
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY | 12 Months Ended |
Dec. 31, 2018 | |
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY | |
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY | 28. CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY CONDENSED BALANCE SHEETS (Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”)) As of December 31, 2017 2018 RMB RMB US$ ASSETS: Current assets: Cash and cash equivalents 1,141 8,455 1,230 Prepaid expenses and other current assets 1,647 2,283 332 Total current assets 2,788 10,738 1,562 Non-current assets: Long term investments 20,045 20,045 2,915 Investments in subsidiaries and consolidated VIEs (514,022) (565,557) (82,257) Total non-current assets (493,977) (545,512) (79,342) TOTAL ASSETS (491,189) (534,774) (77,780) LIABILITIES AND SHAREHOLDERS’ DEFECIT: Current liabilities: Accrued expenses and other payables 7,398 1,489 217 Total current liabilities 7,398 1,489 217 Total liabilities 7,398 1,489 217 Shareholders’ deficit: Ordinary shares (US$0.0001 par value; 1,000,000,000 and 1,000,000,000 shares authorized; 426,267,345 and 429,404,977 shares issued and outstanding as of December 31, 2017 and 2018, respectively) 338 338 49 Additional paid-in capital 1,573,341 1,579,153 229,678 Treasury stock — (18,033) (2,623) Statutory reserves 1,326 1,326 193 Accumulated deficit (2,076,151) (2,100,569) (305,515) Accumulated other comprehensive income 2,559 1,522 221 Total shareholders’ deficit (498,587) (536,263) (77,997) TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT (491,189) (534,774) (77,780) CONDENSED STATEMENTS OF COMPREHENSIVE LOSS (Amounts in thousands of RMB and US$) For the years ended December 31, 2016 2017 2018 RMB RMB RMB US$ General and administrative expenses (21,314) (10,986) (8,551) (1,244) Research and development expenses — — — — Impairment of long-term investments (12,240) (3,290) — — Operating loss (33,554) (14,276) (8,551) (1,244) Interest income 18 — 5 1 Other income 6,593 14,384 21,662 3,151 Foreign exchange gain/(loss) 14,209 (11,043) 4,200 611 Share of losses from subsidiaries and consolidated VIEs (900,743) (358,226) (41,734) (6,070) Loss before income taxes (913,477) (369,161) (24,418) (3,551) Income tax expense — — — — Net loss (913,477) (369,161) (24,418) (3,551) Foreign currency translation (293) 2,748 (1,037) (151) Unrealized gain/(loss) from available-for-sale investments 659 (4,195) — — Amounts reclassified from accumulated other comprehensive income (3,552) 3,290 — — Total other comprehensive (loss)/income, net of tax (3,186) 1,843 (1,037) (151) Comprehensive loss (916,663) (367,318) (25,455) (3,702) CONDENSED STATEMENTS OF CASH FLOWS (Amounts in thousands of RMB and US$) For the years ended December 31, 2016 2017 2018 RMB RMB RMB US$ Net cash used in operating activities (15,395) (22,514) (4,151) (604) Cash flows from investing activities: Cash paid for long term investments (1,842) — — — Cash received from sale of short-term investment 26,828 — — — Net cash provided by investing activities 24,986 — — — Cash flows from financing activities: Proceeds from employee share options exercised 5,427 — — — Payment for repurchase of ordinary shares (39,402) — — — Net cash used in financing activities (33,975) — — — Net (decrease)/increase in cash and cash equivalents (24,384) (22,514) 4,151 604 Cash and cash equivalents at beginning of the year 46,363 24,463 1,141 166 Effect of foreign exchange rate changes on cash 2,484 (808) 3,163 460 Cash and cash equivalents at end of the year 24,463 1,141 8,455 1,230 (a) Basis of presentation The condensed financial information of the Company has been prepared using the same accounting policies as set out in the Company 's consolidated financial statements except that the Company used the equity method to account for investment in its subsidiaries and VIEs. The Company records its investment in its subsidiaries and VIEs under the equity method of accounting. Such investment is presented on the balance sheets as “Investment in subsidiaries” and share of their income as “Share of losses from subsidiaries and Consolidated VIEs” on the statements of comprehensive loss. The PRC subsidiary and VIEs have restrictions on their ability to pay dividends to the Company under PRC laws and regulations (Note 22). The subsidiaries and VIEs did not pay any dividends to the Company for the years presented. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted by reference to the consolidated financial statements. (b) Commitments The Company does not have significant commitments or long-term obligations as of any of the periods presented. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of presentation | (a) Basis of presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S GAAP”). |
Going concern | (b) Going concern The Group experienced net loss of approximately RMB914,253,000, RMB371,166,000 and RMB25,813,000 (US$ 3,754,000) for the years ended December 31, 2016, 2017 and 2018, respectively, negative cash flows from operations of approximately RMB99,039,000 and RMB41,659,000(US$ 6,059,000) for the years ended December 31, 2017 and 2018, respectively. As of December 31, 2018, the Group had net current liabilities of approximately RMB1,004,820,000 (US$ 146,146,000). These conditions raised substantial doubt about the Group's ability to continue as a going concern. When preparing the consolidated financial statements as of December 31, 2018 and for the year then ended, the Group 's management concluded that a going concern basis of preparation was appropriate after analyzing the cash flow forecast for the next twelve months through November 2020. In preparing the cash flow analysis, management took into account of a) the advance of RMB80,000,000 (US$11,636,000) to be received from a third party buyer for selling certain cloud infrastructure buildings under construction and later another RMB1,150,000,000 (US$167,261,000) could be received for the completeness of the whole deal, and b) improvement in the net cash inflow from the CDN operations as the Group plans to locate more new customers from 2020 and control its operating costs and negotiate with vendors for more favorable payment terms. If the Group fails to achieve these goals, the Group may need additional financing to execute its business plan. If additional financing is required, the Group cannot predict whether this additional financing will be in the form of equity, debt, or another form, and the Group may not be able to obtain the necessary additional capital on a timely basis, on acceptable terms, or at all. In the event that financing sources are not available, or that the Group is unsuccessful in increasing its gross profit margin and reducing operating losses, the Group may be unable to implement its current plans for expansion, repay debt obligations or respond to competitive pressures, any of which would have a material adverse effect on the Group's business, prospects, financial condition and results of operations. Management prepared the consolidated financial statements assuming the Group will continue as a going concern. However, there is no assurance that the measures above can be achieved as planned. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. If the Group is unable to continue as a going concern, it may have to liquidate its assets and may receive less than the value at which those assets are carried on the financial statements. |
Principles of consolidation | (c) Principles of consolidation The consolidated financial statements include the financial statements of the Company, its subsidiaries and the VIEs for which the Company is the primary beneficiary. All significant inter-company transactions and balances between the Company, its subsidiaries and the VIEs are eliminated upon consolidation. Results of acquired subsidiaries or VIEs are consolidated from the date on which control is transferred to the Company. |
Use of estimates | (d) Use of estimates The preparation of the consolidated financial statements in conformity with U.S GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. Areas where management uses subjective judgment include, but are not limited to, estimating the useful lives of long-lived assets and intangible assets, impairment of long-term investments, long-lived assets and intangible assets, allowance for doubtful accounts, accounting for deferred income taxes, and accounting for share-based compensation arrangements. The valuation of and accounting for the Group's financial instruments also require significant estimates and judgments provided by management. Changes in facts and circumstances may result in revised estimates. Actual results could differ from those estimates, and as such, differences may be material to the consolidated financial statements. |
Foreign currency | (e) Foreign currency The functional currency of the Company and each of its subsidiaries and VIEs is the Renminbi (“RMB”), except for ChinaCache US, CCAL, ChinaCache HK, ChinaCache IE, and ChinaCache UK, which are the United States dollar (“US$”), US$, Hong Kong dollar (“HK$”), Euro (“EUR”) and Great Britain Pound (“GBP”) respectively, as determined based on the criteria of Accounting Standards Codification (“ASC”) 830 (“ASC 830”) “ Foreign Currency Matters ”. The reporting currency of the Company is also the RMB. Transactions denominated in foreign currencies are re-measured into the functional currency at the exchange rates prevailing on the transaction dates. Foreign currency denominated financial assets and liabilities are re-measured at the balance sheet date exchange rate. Exchange gains and losses are included in foreign exchange gains and losses in the consolidated statements of comprehensive loss. |
Convenience translation | (f) Convenience translation Amounts in US$ are presented for the convenience of the reader and are translated at the noon buying rate of US$1.00 to RMB6.8755 on December 31, 2018 in the City of New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York. No representation is made that the RMB amounts could have been, or could be, converted into US$ at such rate. |
Cash and cash equivalents | (g) Cash and cash equivalents Cash and cash equivalents consist of cash on hand and demand deposits placed with banks or other financial institutions which are unrestricted as to withdrawal and use and have original maturities less than three months. For the purpose of the consolidated statements of cash flows, cash and cash equivalents also consist of cash and cash equivalents included in assets held for sale. |
Restricted Cash | (h) Restricted Cash Restricted cash relates to special deposit accounts required by the Education Commission for the purpose of preventing abusive use of tuition and fees of educational and training institutions, and cash frozen by a court order during the ongoing legal proceedings. |
Accounts receivable and allowance for doubtful accounts | (i) Accounts receivable and allowance for doubtful accounts Accounts receivable are carried at net realizable value. An allowance for doubtful accounts is recorded in the period when loss is probable based on an assessment of specific evidence indicating troubled collection, historical experience, accounts aging and other factors. An accounts receivable is written off after all collection effort has ceased. |
Property and equipment | (j) Property and equipment Property and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives of the assets, as follows: Optical Fibers 20 years Computer equipment 3-15 years Furniture, fixtures and office equipment 5 years Motor vehicles 10 years Leasehold improvements Over the shorter of lease term or the estimated useful lives of the assets Freehold land in United States of America Indefinite Building 20-40 years Repair and maintenance costs are charged to expense when incurred, whereas the cost of betterments that extend the useful life of property and equipment are capitalized as additions to the related assets. Retirement, sale and disposals of assets are recorded by removing the cost and related accumulated depreciation with any resulting gain or loss reflected in the consolidated statements of comprehensive loss. Property and equipment that are purchased or constructed which require a period of time before the assets are ready for their intended use are accounted for as construction-in-progress. Construction-in-progress is recorded at acquisition cost, including installation costs. Construction-in-progress is transferred to specific property and equipment accounts and commences depreciation when these assets are ready for their intended use. The amounts of interest that would be capitalized were immaterial during the years ended December 31, 2016, 2017 and 2018. |
Land use right | (k) Land use right The land use right represents the amounts paid and relevant costs incurred for the right to use land in the PRC and are recorded at purchase cost less accumulated amortization. Amortization is provided on a straight-line basis over the terms of the respective land use right agreement. |
Intangible assets | (l) Intangible assets Intangible assets are carried at cost less accumulated amortization and any impairment. Intangible assets with a finite useful life are amortized using the straight-line method over the estimated economic life of the intangible assets as follows: Purchased software 5 years |
Long-lived assets (disposal group) to be disposed of by sale | (m) Long-lived assets (disposal groups) to be disposed of by sale The Group classifies long-lived assets and disposal groups as held for sale if their carrying amounts will be recovered principally through disposal by sale rather than through continuing use. Such long-lived assets and disposal groups are measured at the lower of their carrying amount and fair value less costs to sell. Costs to sell are the incremental costs directly attributable to the sale, excluding the finance costs and income tax expense. The criteria for held for sale classification is regarded as met only when the sale is highly probable and the asset or disposal group is available for immediate sale in its present condition. Actions required to complete the sale should indicate that it is unlikely that significant changes to the sale will be made or that the decision to sell will be withdrawn. Property and equipment, land use right and intangible assets are not depreciated or amortized once classified as held for sale. Assets and liabilities classified as held for sale are presented separately as current items in the consolidated balance sheets. If circumstances arise that previously were considered unlikely and, as a result, an entity decides not to sell a long-lived asset or disposal group previously classified as held for sale, the asset or disposal group would be reclassified as held and used. The Group measures long-lived assets that are reclassified on an individually basis at the lower of the following: a. Its carrying amount before the asset or disposal group was classified as held for sale, adjusted for any depreciation or amortization expense that would have been recognized had the asset or disposal group been continuously classified as held and used; and b. A disposal group qualifies as discontinued operation if it is a component of the Group that either has been disposed of, or is classified as held for sale, and the disposal represents a strategic shift that has (or will have) a major effect on the Group’s operations and financial results. |
Impairment of long-lived assets | (n) Impairment of long-lived assets The Group evaluates its long-lived assets or asset group, including intangible assets with finite lives, for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying amount of an asset or a group of long-lived assets may not be recoverable. When these events occur, the Group evaluates for impairment by comparing the carrying amount of the assets to future undiscounted net cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flow is less than the carrying amount of the assets, the Group would recognize an impairment loss based on the excess of the carrying amount of the asset group over its fair value. For long-lived assets held for sale, assets are written down to fair value less cost to sell. Fair value is generally determined by discounting the cash flows expected to be generated by the assets, when the market prices are not readily available for the long-lived assets. Impairment charge of RMB399,094,000, RMB21,757,000 and nil was recognized from properties and equipment and intangible assets for the years ended December 31, 2016, 2017 and 2018, respectively. |
Investments | (o) Investments Available-for-sale investments Investments not classified as trading or as held-to-maturity are classified as available-for-sale securities. Such available-for-sale investments are reported at fair value, with unrealized gains and losses recorded in accumulated other comprehensive loss in shareholders’ deficit. Realized gains or losses are charged to earnings during the period in which the gain or loss is realized. If the Group determines a decline in fair value is other-than-temporary, the cost basis of the individual security is written down to its estimated fair value. The new cost basis will not be adjusted for subsequent recoveries in fair value. Determination of whether declines in value are other-than-temporary requires significant judgment. Subsequent increases and decreases in the fair value of available-for-sale securities will be included in other comprehensive loss except for other-than-temporary impairment, which would be charged to current period earnings. Impairment of available-for-sale investments for the years ended December 31, 2016, 2017 and 2018 were nil, RMB 3,290,000 and nil, respectively. Investment in limited partnerships Where consolidation is not appropriate, the Group applies the equity method of accounting that is consistent with ASC 323 “Investments - Equity Method and Joint Ventures” to limited partnerships in which the Group holds either (a) a five percent or greater interest or (b) less than a five percent interest when the Group has more than virtually no influence over the operating or financial policies of the limited partnership. The Group considers certain qualitative factors in assessing whether it has more than virtually no influence for partnership interests of less than five percent. For investments other than those described in (a) and (b) above, the Group applies the cost method of accounting. Cost method investment Prior to adopting ASC Topic 321 (“ASC 321”), Investments – Equity Securities, on January 1, 2018, the Group carries at cost its investments in investees that do not have readily determinable values or investments and over which the Group does not have significant influence, in accordance with ASC subtopic 325-20 (“ASC 325-20”), Investments-Other: Cost Method Investments. The Group carries the investment at cost and only adjusts for other-than-temporary declines in fair value and distributions of earnings that exceed the Group's share of earnings since its investment. Management regularly evaluates the impairment of equity investments without readily determinable fair value based on the performance and financial position of the investee as well as other evidence of market value. Such evaluation includes, but is not limited to, reviewing the investee’s cash position, recent financing, projected and historical financial performance, cash flow forecasts and financing needs. An impairment loss is recognized in earnings equal to the excess of the investment’s cost over its fair value at the balance sheet date of the reporting period for which the assessment is made. The fair value would then become the new cost basis of investment. Impairment of cost method investment for the years ended December 31, 2016, 2017 and 2018 were RMB18,240,000, RMB400,000 and nil, respectively. The Group adopted ASC 321 on January 1, 2018 and the cumulative effect of adopting the new standard on opening accumulated deficit is nil. Pursuant to ASC 321, equity investments, except for those accounted for under the equity method and those that result in consolidation of the investee and certain other investments, are measured at fair value, and any changes in fair value are recognized in earnings. For equity securities without readily determinable fair value and do not qualify for the existing practical expedient in ASC Topic 820 (“ASC 820”), Fair Value Measurements and Disclosures, to estimate fair value using the net asset value per share (or its equivalent) of the investment, the Group elected to use the measurement alternative to measure those investments at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer, if any. Equity securities with readily determinable fair value are measured at fair values, and any changes in fair value are recognized in earnings. Pursuant to ASC 321, for equity investments measured at fair value with changes in fair value recorded in earnings, the Group does not assess whether those securities are impaired. For those equity investments that the Group elects to use the measurement alternative, the Group makes a qualitative assessment of whether the investment is impaired at each reporting date. If a qualitative assessment indicates that the investment is impaired, the entity has to estimate the investment’s fair value in accordance with the principles of ASC 820. If the fair value is less than the investment’s carrying value, the entity has to recognize an impairment loss in net income equal to the difference between the carrying value and fair value. |
Fair value of financial instruments | (p) Fair value of financial instruments The carrying amounts of financial assets and liabilities, such as cash and cash equivalents, restricted cash, accounts receivable, other receivables included in prepaid expenses and other current assets, short-term investments, short term borrowings, accounts payables, accrued expenses, balances with related parties and other payables, approximate their fair values because of the short-term maturity of these instruments. The carrying amounts of long-term borrowings approximates its fair value since it bears interest rate which approximates market interest rates. Available-for-sale investments were initially recognized at cost and subsequently remeasured at the end of each reporting period with the adjustment in its fair value recognized in accumulated other comprehensive income. The Group, with the assistance of an independent third-party valuation firm, determined the estimated fair value of its available-for-sale investments that are recognized in the consolidated financial statements. |
Revenue recognition | (q) Revenue recognition The Group provides a portfolio of content and application delivery total solutions within its one class of services, such as, web page content services; file transfer services; rich media streaming services; guaranteed application delivery; managed internet data services; cloud services; content bridging services; mobile internet solution; and value-added services to its customers that in turn improve the performance, reliability and scalability of their internet services and applications. On January 1, 2018, the Group adopted ASU No. 2014-09, Revenue from Contracts with Customers, (“ASC 606”), which supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition, (“ASC 605”), using the modified retrospective transition method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts have not been adjusted and continue to be reported in accordance with historic accounting under ASC 605. The impact of adopting the new revenue standard was not material to consolidated financial statements and there was no adjustment to beginning retained earnings on January 1, 2018. Under ASC 606, an entity recognizes revenue as the Company satisfies a performance obligation when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price, including variable consideration, if any; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration to which it is entitled in exchange for the goods or services it transfers to the customer. Once a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews the contract to determine which performance obligations it must deliver and which of these performance obligations are distinct. The Company recognizes revenue based on the amount of the transaction price that is allocated to each performance obligation when that performance obligation is satisfied or as it is satisfied. The Company is a principal and records revenue on a gross basis when the Company is primarily responsible for fulfilling the service, has discretion in establish pricing and controls the promised service before transferring that service to customers. Otherwise, the Company records revenue at the net amounts as commissions. The Group generates revenue from CDN, IDC and IX services under ASC Topic 606: CDN Services CDN is a content distribution network built on the network. Relying on the edge servers deployed in various regions, through load balancing, content distribution, scheduling and other functional modules of the central platform, CDN enables users to obtain the required content nearby, reduces network congestion, and improves user access response speed and hit rate. For revenue stream of CDN, the promised service is to provide CDN service to the customer, which is qualified as a single distinct performance obligation. The contract price is fixed when entered into by the both parties. CDN services are typically provided to customers over the contract service period and the related revenues are recognized on a straight-line basis over the term of the contract. The Group is a principal and records revenue for CDN service on a gross basis. IDC Services IDC services provide cabinet rental and bandwidth service to customer. The Company provides two promised services, cabinet rental and bandwidth service. According to 606-10-25-19, though the service is capable of being distinct as the customer can benefit from the good or service on its own, which is evidenced by the fact that these two services are capable of being separated by its nature. However, the promise to transfer service is not distinct within the context of the contract and the goal of IDC is to combine traditional internet data center and content delivery. The reason why the customers renting the Company's cabinet is not only to benefit from the Company's physical hosting location and maintenance service, but also to enjoy the bandwidth service provided by the Company. It is cost efficient to consume the Company's bandwidth service rather than to connect directly to bandwidth service provider such as China Unioncom or China Mobile. Thus these two promise service within the contract of IDC service-cabinet rental and bandwidth service are not distinct and shall be identified as one performance obligation. Typically IDC services are provided to customers for a fixed amount over the contract service period and the related revenues are recognized on a straight-line basis over the term of the contract. The Group is a principal and records revenue for IDC service on a gross basis. IX Services IX Services allow networks to interconnect directly, via the exchange, rather than through one or more third-party networks. The primary advantages of direct interconnection are cost, latency, and bandwidth. Same as IDC, there are two promised service within the contract, one is to provide a port usage and the other is to provide bandwidth. However, the service is not distinct within context of the contract as the services provided is highly integrated. Thus only one performance obligation is indentified for IX revenue stream. The contract price is fixed when entered into by the both parties. IX services are provided to customers over the contract service period and the related revenues are recognized on a straight-line basis over the term of the contract. The Group is a principal and records revenue for IX service on a gross basis. Effective in September 2012, 6% of value-added tax, or VAT, replaced the original 5% business tax in Beijing as a result of the PRC government’s pilot VAT reform program, which applies to all services provided by ChinaCache Beijing and Beijing Jingtian and certain services provided by Beijing Blue IT. Effective in June 2014, 6% of VAT replaced the original 3% business tax in Beijing as a result of the PRC government’s pilot VAT reform program on telecom industry, which applies to all services provided by Beijing Blue IT. Disaggregation of revenues The following table illustrates the disaggregation of revenue by revenue stream and by timing of revenue recognition for the years ended December 31, 2016, 2017 and 2018: For the Years Ended December 31, 2016 2017 2018 RMB’000 RMB’000 RMB’000 US$’000 CDN Services 927,903 669,938 709,498 103,192 IDC Services 85,314 149,316 185,973 27,049 IX Services 41,018 33,314 27,120 3,944 Total 1,054,235 852,568 922,591 134,185 The following table provides information about accounts receivables and contract liabilities from contracts with customers: Years as of December 31, 2017 2018 RMB’000 RMB’000 US$’000 Accounts receivables 161,043 210,476 30,612 Advance from customers 10,361 18,598 2,705 |
Cost of revenues | (q) Cost of revenues Cost of revenue consists primarily of depreciation of the Group's long-lived assets, amortization of acquired intangible assets, maintenance, purchase of bandwidth and other overhead expenses directly attributable to the provision of content and application delivery total solutions. All the services provided by the Group in the PRC, including VIEs are subject to VAT. Such VAT (to the extent that is non-deductible) and other surcharges are accrued and charged to cost of revenues as the related exclusive business support, technical and consulting services are rendered. |
Advertising expenditures | (r) Advertising expenditures Advertising expenditures are expensed as incurred. Advertising expenditures, included in sales and marketing expenses, amounted to approximately RMB233,018, RMB 200,000 and nil for the years ended December 31, 2016, 2017 and 2018, respectively. |
Research and development costs | (s) Research and development costs Research and development costs consist primarily of payroll and related personnel costs for minor routine upgrades and related enhancements to the Group's services and network. Costs incurred in the development of the Group's services are expensed as incurred. To date, the amount of costs qualifying for capitalization has been insignificant. |
Government Grants | (t) Government grant Government grant are provided by the relevant PRC municipal government authorities to subsidize the cost of certain research and development projects. The amount of such government grant is determined solely at the discretion of the relevant government authorities and there is no assurance that the Group will continue to receive these government grant in the future. Government grant are recognized when it is probable that the Group will comply with the conditions attached to them, and the grant are received. When the grant relates to an expense item, it is recognized as deferred government grant and released to the consolidated statements of comprehensive loss over the period necessary to match the grant on a systematic basis to the costs that it is intended to compensate, as other operating income. Where the grant relates to an asset, it is recognized as deferred government grant and released to the consolidated statements of comprehensive loss in equal amounts over the expected useful life of the related asset, when operational, as other operating income. Government grant received by the Group also consist of unrestricted grant which are received on an unsolicited and unconditional basis to support the growth of the Group and do not relate to the Group 's operating activities. Unrestricted grant is classified as non-operating income and recorded in other income on the consolidated statements of comprehensive loss upon receipt. |
Leases | (u) Leases Leases are classified at the inception date as either a capital lease or an operating lease. The Group did not enter into any leases whereby it is the lessor for any of the periods presented. The Group leases equipment under capital lease agreements. As the lessee, a lease is a capital lease if any of the following conditions exists: a) ownership is transferred to the lessee by the end of the lease term, b) there is a bargain purchase option, c) the lease term is at least 75% of the property’s estimated remaining economic life, or d) the present value of the minimum lease payments at the beginning of the lease term is 90% or more of the fair value of the leased property to the lessor at the inception date. A lease involving integral equipment is a capital lease only if condition (a) or (b) exists. A capital lease is accounted for as if there was an acquisition of an asset and an incurrence of an obligation at the inception of the lease. All other leases are accounted for as operating leases wherein rental payments are expensed on a straight-line basis over the periods of their respective leases. The Group leases office space under operating lease agreements. Certain of the lease agreements contain rent holidays. Rent holidays are considered in determining the straight-line rent expense to be recorded over the lease term. The lease term begins on the date of initial possession of the lease property for purposes of recognizing lease expense on a straight-line basis over the term of the lease. The excess of rent expense and rent paid, as the case may be for respective leases, is recorded as deferred rental included in the prepaid expenses and other current assets in the consolidated balance sheets. |
Income taxes | (v) Income taxes The Group follows the liability method in accounting for income taxes in accordance to ASC topic 740 "Taxation" (“ASC 740”), Income Taxes. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Group records a valuation allowance against deferred tax assets if, based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The Group adopted ASC 740 to account for uncertainty in income taxes. ASC 740 clarifies the accounting for uncertainty in income taxes by prescribing the recognition threshold a tax position is required to meet before being recognized in the consolidated financial statements. The Group has elected to classify interest and penalties related to unrecognized tax benefits, if and when required, as part of “interest expense” and “other expenses,” respectively, in the consolidated statements of comprehensive loss. |
Share-based compensation | (w) Share-based compensation Share options and restricted share units award granted to employees are accounted for under ASC 718 “Compensation – Stock Compensation” . In accordance with ASC 718, the Company determines whether share options or restricted share units award should be classified and accounted for as liability or equity award. All grants of share options and restricted share units award to employees classified as equity award are recognized in the financial statements over their requisite service periods based on their grant date fair values. The Company has elected to recognize compensation expenses using the accelerated method for its share options and restricted share units granted. For restricted share awards granted with performance conditions, the Company commences recognition of the related compensation expense if it is probable the defined performance condition will be met. To the extent that the Company determines that it is probable that a different number of share-based awards will vest depending on the outcome of the performance condition, the cumulative effect of the change in estimate is recognized in the period of change. Forfeitures are recognized when they occur. The Company, with the assistance of an independent valuation firm, determined the estimated fair values of the share options granted to employees and non-employees using the binomial option pricing model. On January 1, 2018, the Company adopted ASU 2017-09 ”Compensation - Stock Compensation: Scope of Modification Accounting”, which provides clarity and reduces both (1) diversity in practice and (2) cost and complexity when applying the guidance in ASC 718 to a change to the terms or conditions of a share-based payment award. The adoption of ASU 2017-09 did not have a material impact on the Company’s consolidated financial statements. |
Loss per share | (x) Loss per share In accordance with ASC 260, “ Earnings per Share”, basic loss per share is computed by dividing net loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year. Diluted loss per share is calculated by dividing net loss attributable to ordinary shareholders as adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the period. Ordinary equivalent shares consist of the ordinary shares issuable upon the conversion of the share options, using the treasury stock method. Ordinary share equivalents are excluded from the computation of diluted per share if their effects would be anti-dilutive. |
Comprehensive loss | (y) Comprehensive loss Comprehensive loss is defined as the decrease in equity of the Group during a period from transactions and other events and circumstances excluding transactions resulting from investments by owners and distributions to owners. Comprehensive loss is reported in the consolidated statements of comprehensive loss. Accumulated other comprehensive income of the Group includes foreign currency translation adjustments related to ChinaCache US, CCAL, ChinaCache HK and ChinaCache IE, and ChinaCache UK whose functional currency are US$, US$, HK$, EUR and GBP respectively, and the change in fair value of available-for-sale investments (Note 12) and their corresponding deferred tax impact, if any. |
Segment reporting | (z) Segment reporting The Group follows ASC 280, “ Segment Reporting.” The Group's Chief Executive Officer or chief operating decision-maker reviews the consolidated financial results when making decisions about allocating resources and assessing the performance of the Group as a whole and hence, the Group has only one reportable segment. The Group operates and manages its business as a single segment through the provision of a single class of global services for accelerating and improving the delivery of content and applications over the Internet. As the Group's long-lived assets are substantially all located in the PRC, revenues are derived from each subsidiary and most of the services are provided in PRC, no geographical segments are presented. |
Employee benefits | (aa) Employee benefits The full-time employees of the Company’s PRC subsidiaries are entitled to staff welfare benefits including medical care, housing fund, unemployment insurance and pension benefits, which are government mandated defined contribution plans. These entities are required to accrue for these benefits based on certain percentages of the employees’ respective salaries, subject to certain ceilings, in accordance with the relevant PRC regulations, and make cash contributions to the state-sponsored plans out of the amounts accrued. The total amounts for such employee benefits, which were expensed as incurred, were RMB53,669,000, RMB44,416,000 and RMB29,288,000 (US$4,260,000) for the years ended December 31, 2016, 2017 and 2018, respectively. |
Share Repurchase Program | (bb) Share repurchase program Pursuant to Board of Directors’ resolutions on December 18, 2014 (“2014 Share Repurchase Plan”), August 24, 2015 (“August 2015 Share Repurchase Plan”) and December 28, 2015 (“December 2015 Share Repurchase Plan”), the Company’s management is authorized to repurchase up to US$10 million, US$6 million and US$5 million of the Company’s ADSs (each ADS represent 16 ordinary shares), respectively. Each of the share repurchase plan is effective for 12 months. During the year ended December 31, 2016, the Company had repurchased 166,802 ADSs amounting to US$1,185,000 (equivalent to RMB7,659,000) and 691,364 ADSs amounting to US$4,912,000 (equivalent to RMB31,743,000) under the August 2015 Share Repurchase Plan and the December 2015 Share Repurchase Plan, respectively. As of December 31, 2016, all the aforementioned repurchase plans have been completed. During the year ended December 31, 2017 and 2018, there were nil and nil shares were repurchased, respectively. The Group accounted for those shares repurchase as treasury stock at cost in accordance to ASC Subtopic 505-30 (“ASC 505-30”), “ Treasury Stock” , and is shown separately in the shareholders’ deficit as the Group has not yet decided on the ultimate disposition of those ADSs acquired. When the Group uses the treasury stock to settle the exercise of share options and restricted share units vested, the difference between the proceeds received upon settlement and the repurchase price is debited into accumulated deficit. When the Group decides to retire the treasury stock, the difference between the par value and the repurchase price is debited into accumulated deficit. |
Recent Accounting Pronouncement | (cc) Recent accounting pronouncement In February 2016, the FASB issued ASU No. 2016-02 (“ASU 2016-02”), Leases (Topic 842), which requires a lessee to recognize a lease liability and a right-of-use asset for all leases with lease terms of more than 12 months. This guidance is effective for annual reporting periods beginning after December 15, 2018, including interim periods within those years, and early adoption is permitted. In January 2018, the FASB issued ASU No. 2018-01, Leases: Land Easement Practical Expedient, (“ASU 2018-01”), which provides an optional transition practical expedient for land easements. The effective date of the transition requirements for the amendment is the same as the effective date and transition requirements in ASU 2016-02. Subsequently, the FASB issued ASU No. 2018-10 Codification Improvements to Topic 842, Leases, (“ASU 2018-10”), which clarifies certain aspects of the guidance issued in ASU 2016-02; and ASU No. 2018-11, Leases (Topic 842): Targeted Improvements, (“ASU 2018-11”), which provides an additional transition method and a practical expedient for separating components of a contract for lessors. ASU 2016-02 modifies existing guidance for off balance sheet treatment of lessees’ operating leases by requiring lessees to recognize lease assets and lease liabilities. Under ASU 2016-02, lessor accounting is largely unchanged. ASU 2018-10 clarifies certain provisions and correct unintended applications of the guidance such as the application of implicit rate, lessee reassessment of lease classification, and certain transition adjustments that should be recognized to earnings rather than to stockholders’ equity. ASU 2018-11 provides an alternative transition method and practical expedient for separating contract components for the adoption of Topic 842. ASU 2018-11, ASU 2018-10, and ASU 2016-02 (collectively, “the new lease standards”) are effective for public business entities for annual reporting periods and interim periods within those years beginning after December 15, 2018. These new lease standards become effective for the Group on January 1, 2019. The Group will adopt this standard effective January 1, 2019 using the modified retrospective method, and chose to apply the new standard as of the effective date and will not restate comparable period. Consequently, all of the Group's operating lease commitments were recognized as lease liabilities, with corresponding right-of-use assets, based on the present value of the remaining minimum rental payments under current leasing standards for existing operating leases. The Group will elect the package of practical expedients permitted under the transition guidance within the new standard, which permits the Group not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs. The Group's operating leases mainly related to offices and data center space will be subject to ASU 2016-02 and right-of-use assets and lease liabilities will be recognized on the Group's consolidated balance sheet. The Group currently believes the most significant change will be related to the recognition of right-of-use assets and lease liabilities on the Group's balance sheet for operating leases. The Group does not expect any material impact on net assets and the consolidated statement of comprehensive loss as a result of adopting the new standards. In June 2016, the FASB issued ASU No. 2016-13 (“ASU 2016-13”), Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . ASU 2016-13 changes the impairment model for most financial assets and certain other instruments. The standard will replace “incurred loss” approach with an “expected loss” model for instruments measured at amortized cost. For available-for-sale debt securities, entities will be required to record allowances rather than reduce the carrying amount, as they do today under the other-than-temporary impairment model. The standard is effective for public business entities for annual periods beginning after December 15, 2019, and interim periods therein. Early adoption is permitted. The Group is currently evaluating the impact of adopting this standard on its consolidated financial statements. In June 2018, the FASB issued ASU No. 2018-07 (“ASU 2018-07”), Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. The update was issued as part of the FASB simplification initiative and requires an entity to apply the requirements of Topic 718 to nonemployee awards, with certain exceptions, which were previously accounted under Topic 505. The amendments in this update are effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. Early adoption is permitted, but no earlier than an entity’s adoption date of Topic 606. The Group will evaluate any future grants to non-employees under the updated guidance once effective. The Group is currently evaluating the impact of adopting this standard on its consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13 (“ASU 2018-13”), Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. The amendments in the issued update remove, modify and add disclosure requirements on fair value measurements in Topic 820 Fair Value Measurements. The amendments in this update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Certain amendments in the update should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented. Early adoption is permitted upon issuance of this update. An entity is permitted to early adopt any removed or modified disclosures upon issuance of this update and delay adoption of the additional disclosures until their effective date. The Group is currently evaluating the impact of adopting this standard on its consolidated financial statements. In October 2018, the FASB issued ASU No. 2018-17 (“ASU 2018-17”), Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities. The updated guidance requires entities to consider indirect interests held through related parties under common control on a proportional basis rather than as the equivalent of a direct interest in its entirety when determining whether a decision-making fee is a variable interest. The amendments in this update are effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. These amendments should be applied retrospectively with a cumulative-effect adjustment to retained earnings at the beginning of the earliest period presented. The Group is currently evaluating the impact of adopting this standard on its consolidated financial statements. Recently issued ASUs by the FASB, except for the ones mentioned above, have no material impact on the Group's consolidated results of operations or financial position. |
Comparative information | (dd) Comparative information Certain items in prior years’ consolidated financial statements have been reclassified to conform to the current year’s presentation to facilitate comparison. |
ORGANIZATION (Tables)
ORGANIZATION (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
ORGANIZATION | |
Schedule of subsidiaries of the Company and variable interest entities where the Company is the primary beneficiary | As of December 31, 2018, subsidiaries of the Company and variable interest entities (“VIEs”) where the Company is the primary beneficiary include the following: Date of Place of Percentage of incorporation incorporation ownership Principal activities Subsidiaries ChinaCache Network Technology (Beijing) Ltd. (“ChinaCache Beijing”) August 25, 2005 The PRC 100 % Provision of technical consultation services ChinaCache North America Inc. (“ChinaCache US”) August 16, 2007 United States of America 100 % Provision of content and application delivery services JNet Holdings Limited (“JNet Holdings”) September 27, 2007 British Virgin Islands 100 % Investment holding ChinaCache Networks Hong Kong Ltd. (“ChinaCache HK”) April 7, 2008 Hong Kong 100 % Provision of content and application delivery services ChinaCache Xin Run Technology (Beijing) Co., Ltd. (“Xin Run”) July 18, 2011 The PRC 99 %** Construction of cloud infrastructure Metasequoia Investment Inc. (“Metasequoia”) March 28, 2012 British Virgin Islands 100 % Investment holding ChinaCache Ireland Limited (“ChinaCache IE”) **** November 18, 2013 Ireland 100 % Provision of content and application delivery services Beijing Shou Ming Technology Co., Ltd. (“Beijing Shou Ming”) August 15, 2014 The PRC 99 %** Computer hardware, technology development Beijing Shuo Ge Technology Co., Ltd. (“Beijing Shuo Ge”) **** August 15, 2014 The PRC 99 %** Mechanical equipment lease Beijing Zhao Du Technology Co., Ltd. (“Beijing Zhao Du”) *** August 15, 2014 The PRC 99 %** Mechanical equipment lease ChinaCache Networks (UK) Limited (“ChinaCache UK”) March 10, 2016 England and Wales % Provision of content and application delivery services ChinaCache Assets LLC (“CCAL”) August 10, 2016 United States of America % Real estate management VIEs Beijing Blue I.T. Technologies Co., Ltd. (“Beijing Blue IT”) * June 7, 1998 The PRC — Provision of content and application delivery services Beijing Jingtian Technology Limited (“Beijing Jingtian”) * September 1, 2005 The PRC — Provision of content and application delivery services ChinaCache Shouming Technology (Beijing) Co., Ltd. ("ChinaCache Shouming") * June 6, 2018 The PRC — Technology Development * ** *** |
Schedule of financial information of the consolidated VIEs before eliminating the intercompany balances and transactions between the consolidated VIEs and other entities within the Group | As of December 31, 2017 2018 RMB RMB US$ ASSETS: Current assets: Cash and cash equivalents 27,113 14,557 2,117 Restricted cash — 3,169 461 Accounts receivable (net of allowance for doubtful accounts of RMB80,612 and RMB80,484 (US$11,706) as of December 31, 2017 and 2018, respectively) 76,359 72,844 10,595 Prepaid expenses and other current assets 45,007 12,711 1,849 Amounts due from inter-companies (1) 185,801 9,572 1,392 Total current assets 334,280 112,853 16,414 Non-current assets: Property and equipment, net — 2,291 333 Intangible assets, net — 35 5 Long term investments 10,103 10,103 1,469 Long term deposits and other non-current assets 7,345 4,711 686 Total non-current assets 17,448 17,140 2,493 TOTAL ASSETS 351,728 129,993 18,907 As of December 31, 2017 2018 RMB RMB US$ LIABILITIES: Current liabilities: Short-term borrowings 9,960 — — Accounts payable 353,133 316,963 46,100 Accrued employee benefits 32,783 24,898 3,621 Accrued expenses and other current liabilities 29,728 38,915 5,660 Other payables 15,547 15,072 2,192 Income tax payable 10,455 10,991 1,599 Amounts due to inter-companies (1) 499,375 263,551 38,332 Amounts due to subsidiaries held for sale (2) 737 737 107 Current portion of capital lease obligations 42,735 1,284 187 Deferred government grant 13,000 1,696 247 Total current liabilities 1,007,453 674,107 98,045 Non-current liabilities: Non-current portion of capital lease obligations 1,421 — — Deferred government grant 6,581 14,350 2,087 Total non-current liabilities 8,002 14,350 2,087 Total liabilities 1,015,455 688,457 100,132 (1) Amount due from/to inter-companies consist of intercompany receivables/payables to the other companies within the Group. (2) Information with respect to subsidiaries held for sale is discussed in Note 10. For the Years Ended December 31, 2016 2017 2018 RMB’000 RMB’000 RMB’000 US$’000 Net revenues -Third party customers 658,475 479,012 344,108 50,048 -Inter-companies 321,161 342,035 499,017 72,579 Net (loss)/profit (627,544) (88,547) 105,324 15,319 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of estimated useful lives of property and equipment | Optical Fibers 20 years Computer equipment 3-15 years Furniture, fixtures and office equipment 5 years Motor vehicles 10 years Leasehold improvements Over the shorter of lease term or the estimated useful lives of the assets Freehold land in United States of America Indefinite Building 20-40 years |
Schedule of estimated economic life of the intangible assets | Purchased software 5 years |
Schedule of disaggregation of revenue by revenue stream and by timing of revenue recognition from continuing operations | For the Years Ended December 31, 2016 2017 2018 RMB’000 RMB’000 RMB’000 US$’000 CDN Services 927,903 669,938 709,498 103,192 IDC Services 85,314 149,316 185,973 27,049 IX Services 41,018 33,314 27,120 3,944 Total 1,054,235 852,568 922,591 134,185 The following table provides information about accounts receivables and contract liabilities from contracts with customers: Years as of December 31, 2017 2018 RMB’000 RMB’000 US$’000 Accounts receivables 161,043 210,476 30,612 Advance from customers 10,361 18,598 2,705 |
CONCENTRATION OF RISK (Tables)
CONCENTRATION OF RISK (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenues | |
CONCENTRATION OF RISK | |
Schedule of concentration risk | Years as of December 31, 2016 2017 2018 RMB’000 RMB’000 RMB’000 US$’000 Customer A 346,764 317,260 503,676 73,257 Customer B 94,974 * * * Customer C * 118,970 * * |
Accounts receivables | |
CONCENTRATION OF RISK | |
Schedule of concentration risk | Years as of December 31, 2017 2018 RMB’000 RMB’000 US$’000 Customer A 73,442 122,504 17,817 |
CASH, CASH EQUIVALENTS AND REST
CASH, CASH EQUIVALENTS AND RESTRICTED CASH (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
CASH ,CASH EQUIVALENTS AND RESTRICTED CASH | |
Schedule of cash and cash equivalents | December 31, 2017 2018 RMB’000 RMB’000 US$’000 Cash and cash equivalents on the consolidated balance sheets 106,708 41,127 5,982 |
Schedule of restricted cash | December 31, 2017 2018 RMB’000 RMB’000 US$’000 Restricted cash — 5,461 794 |
ACCOUNTS RECEIVABLE, NET (Table
ACCOUNTS RECEIVABLE, NET (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
ACCOUNTS RECEIVABLE, NET | |
Schedule of accounts receivable and allowance for doubtful accounts | December 31, 2017 2018 RMB’000 RMB’000 US$’000 Accounts receivable 242,344 292,842 42,591 Less: allowance for doubtful accounts (81,301) (82,366) (11,979) 161,043 210,476 30,612 |
Schedule of analysis of the allowance for doubtful accounts | December 31, 2017 2018 RMB’000 RMB’000 US$’000 Balance, beginning of year 63,921 81,301 11,824 Additions for the current year 18,432 6,719 977 Recovery (1,052) (5,654) (822) Balance, end of year 81,301 82,366 11,979 |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | |
Schedule of prepaid expenses and other current assets | December 31, 2017 2018 RMB’000 RMB’000 US$’000 Prepaid expense for bandwidth and servers (i) 4,029 9,491 1,380 Staff field advances 525 596 87 Capital lease deposits 29,224 1,684 245 Prepaid commission (ii) 99,700 99,700 14,501 Prepaid service fee 30,200 10,000 1,454 Other deposit and receivables(iii) 35,933 34,095 4,959 Prepaid income tax 13,534 14,220 2,068 Prepaid expense and other current assets 213,145 169,786 24,694 Provision of doubtful accounts (161) (151) (22) Prepaid expense and other current assets, net 212,984 169,635 24,672 i) ii) iii) |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
PROPERTY AND EQUIPMENT, NET | |
Schedule of property and equipment, including those held under capital leases | December 31, 2017 2018 RMB’000 RMB’000 US$’000 At cost: Optical fibers 13,100 13,100 1,905 Computer equipment 928,293 1,004,948 146,164 Furniture and fixtures 10,612 10,218 1,486 Leasehold improvements 18,769 18,782 2,732 Motor vehicles 10,157 9,842 1,431 Buildings 58,150 324,716 47,228 Freehold land 4,275 4,517 657 1,043,356 1,386,123 201,603 Less: accumulated depreciation (587,032) (567,835) (82,588) Less: impairment (402,998) (403,221) (58,646) 53,326 415,067 60,369 |
Schedule of depreciation expenses | For the years ended December 31, 2016 2017 2018 RMB’000 RMB’000 RMB’000 US$’000 Cost of revenue 130,724 8,090 11,999 1,745 Sales and marketing expenses 138 4 — — General and administrative expenses 11,799 1,050 9 1 Research and development expenses 12,564 1 9 1 155,225 9,145 12,017 1,747 |
Schedule of carrying amounts of the company's property and equipment held under capital leases at respective balance sheet dates | December 31, 2017 2018 RMB’000 RMB’000 US$’000 At Cost: Optical fibers 13,100 13,100 1,905 Computer equipment 228,489 292,489 42,541 241,589 305,589 44,446 Less: accumulated depreciation (75,427) (75,644) (11,002) Less: impairment (166,162) (166,162) (24,167) — 63,783 9,277 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
INTANGIBLE ASSETS | |
Schedule of the Company's intangible assets | December 31, 2017 2018 RMB’000 RMB’000 US$’000 Purchased software, net - beginning — 165 24 Addition 993 42 6 Reclassified from assets held for sale (Note 10) 4,258 — — Less: amortization (1,216) (64) (9) Less: impairment (3,870) — — 165 143 21 The Group recognized RMB11,728,000, RMB3,870,000 and nil impairment loss for the years ended December 31, 2016, 2017 and 2018, respectively. |
Schedule of estimated annual amortization expense for each of the five succeeding fiscal years | The estimated annual amortization expense for each of the five succeeding fiscal years is as follow: Amortization RMB’000 US$’000 For the years ending December 31, 2019 64 9 2020 59 9 2021 8 1 2022 8 1 2023 4 1 |
LAND USE RIGHT (Tables)
LAND USE RIGHT (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
LAND USE RIGHT | |
Schedule of Land Use Right | December 31 2017 2018 RMB’000 RMB’000 US$’000 Land use right 34,057 34,057 4,953 Less: accumulated amortization (1,155) (1,885) (274) 32,902 32,172 4,679 |
ASSETS HELD FOR SALE _ LIABIL_2
ASSETS HELD FOR SALE / LIABILITIES HELD FOR SALE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
ASSETS HELD FOR SALE / LIABILITIES HELD FOR SALE | |
Schedule of major classes of assets and liabilities held for sale | December 31, 2017 2018 RMB’000 RMB'000 US$’000 Cash and cash equivalents 1 1 — Prepaid expenses and other current assets 15,478 15,478 2,252 Amounts due from the Company 737 737 107 Property and equipment 550,606 550,225 80,027 Land use right, net 14,909 14,909 2,168 Assets held for sale 581,731 581,350 84,554 Accrued expenses and other current liabilities 1,863 5,293 770 Amounts due to the Company 2,025 2,698 392 Liabilities held for sale 3,888 7,991 1,162 |
Schedule of operating results of the disposal group | For the years ended December 31, 2016 2017 2018 RMB’000 RMB’000 RMB’000 US$’000 Net revenue 2,442 — — — Loss before income taxes (107,399) (3,000) (3,654) (531) |
CLOUD INFRASTRUCTURE CONSTRUC_2
CLOUD INFRASTRUCTURE CONSTRUCTION IN PROGRESS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
CLOUD INFRASTRUCTURE CONSTRUCTION IN PROGRESS | |
Schedule of cloud infrastructure construction in progress | December 31, 2017 2018 RMB’000 RMB’000 US$’000 Cloud infrastructure construction in progress 416,352 289,280 42,074 |
LONG TERM INVESTMENTS (Tables)
LONG TERM INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
LONG TERM INVESTMENTS | |
Schedule of long term investments | December 31, 2017 2018 RMB’000 RMB’000 US$’000 Cost method investments: PRC Fund 10,103 10,103 1,469 United States Fund 20,045 20,045 2,916 Investment in Flashapp Inc. (“Flashapp”) 12,240 12,240 1,780 Investment in ordinary shares of an unlisted company in PRC ("Investee A") 6,000 6,000 873 Investment in preferred shares of an unlisted company in PRC ("Investee B") 400 400 58 Available-for-sale investments: Investment in convertible borrowings of an unlisted company in Cayman Islands ("Investee D") 3,973 3,973 578 Less: accumulated impairment (22,613) (22,613) (3,289) Total 30,148 30,148 4,385 |
BORROWINGS (Tables)
BORROWINGS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
BORROWINGS | |
Schedule of short term borrowings | December 31, 2017 2018 RMB’000 RMB’000 US$’000 Bank loan 9,960 — — Other borrowing — 13,850 2,014 Total 9,960 13,850 2,014 |
Schedule of long term borrowings | December 31, 2017 2018 RMB’000 RMB’000 US$’000 Long-term bank loan 209,598 372,926 54,239 Long-term other borrowing 34,622 — — Less: current portion (32,642) (58,355) (8,487) Total 211,578 314,571 45,752 |
Schedule of future installment payment | December 31, 2018 RMB’000 US$’000 2019 80,000 11,636 2020 200,000 29,089 2021 80,000 11,636 2022 20,000 2,909 Total 380,000 55,270 |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
Schedule of Accrued expenses and other current liabilities | December 31, 2017 2018 RMB’000 RMB’000 US$’000 Advance from customers 10,361 18,598 2,705 Other accrued expenses 26,876 21,764 3,164 Other tax payables 2,045 7,272 1,058 39,282 47,634 6,927 |
OTHER PAYABLES (Tables)
OTHER PAYABLES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
OTHER PAYABLES | |
Schedule of Other payables | December 31, 2017 2018 RMB’000 RMB’000 US$’000 Payables for purchase of property and equipment 257,375 393,287 57,202 Consideration received for disposal of Zhao Du and Shuo Ge (Note 10) 997,000 997,000 145,008 Other Payables — 13,567 1,974 1,254,375 1,403,854 204,184 |
DEFERRED GOVERNMENT GRANT (Tabl
DEFERRED GOVERNMENT GRANT (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
DEFERRED GOVERNMENT GRANT | |
Schedule of deferred government grant | December 31, 2017 2018 RMB’000 RMB’000 US$’000 Beginning balance 24,208 19,580 2,848 Received during the year — — — Recognized as income during the year (4,628) (3,534) (514) Total balance of deferred government grant 19,580 16,046 2,334 Less: current portion 13,000 1,696 247 Balance of non-current deferred government grant 6,580 14,350 2,087 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
SHARE-BASED COMPENSATION | |
Summary of the Company's restricted shares award ("RSUs") issued under 2011 Plan | Number of Weighted average grant ordinary shares date fair value (US$) Outstanding, January 1, 2017 7,901,127 0.46 Expected to vest at January 1, 2017 7,901,127 0.46 Granted 16,813,344 0.07 Vested (20,555,835) 0.16 Forfeited (1,935,168) 0.45 Outstanding, December 31, 2017 2,223,468 0.14 Expected to vest at December 31, 2017 2,223,468 0.14 Granted 480,000 0.07 Vested (1,503,212) 0.35 Forfeited (560,256) 0.43 Outstanding, December 31, 2018 640,000 0.07 Expected to vest at December 31, 2018 640,000 0.07 |
Schedule of total compensation expense relating to all options and RSUs recognized | For the years ended December 31, 2016 2017 2018 (RMB)’000 (RMB)’000 (RMB)’000 (US$)’000 Cost of revenues 5,961 490 Sales and marketing expenses 2,753 254 General and administration expenses 72,483 9,630 Research and development expenses 3,828 562 85,025 10,936 |
Employees | |
SHARE-BASED COMPENSATION | |
Summary of entity's share option activity | Weighted Weighted average average remaining Aggregate Number of Exercise contractual intrinsic options price term value (US$) (Years) (US$’000) Outstanding, January 1, 2017 10,938,077 0.25 4.59 76 Vested and expected to vest at January 1, 2017 10,938,077 0.25 4.59 76 Granted 15,080,000 0.07 — — Forfeited (904,720) 0.27 — — Outstanding, December 31, 2017 25,113,357 0.14 7.26 586 Vested and expected to vest at December 31, 2017 25,113,357 0.14 7.26 586 Exercisable at December 31, 2017 16,918,975 0.22 6.14 312 Granted 17,600,000 0.06 — — Exercised (1,096,896) 0.08 — — Forfeited (4,247,232) 0.06 — — Outstanding, December 31, 2018 37,369,229 0.11 7.81 2 Vested and expected to vest at December 31, 2018 37,369,229 0.11 7.81 2 Exercisable at December 31, 2018 16,222,688 0.17 5.93 2 |
Schedule of assumptions used in calculation of estimated fair value of the options | 2018 Suboptimal exercise factor 2.2-2.8 Risk-free interest rates 2.78 % Expected volatility 88 % Expected dividend yield 0 % Weighted average fair value of share option 0.0469 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME | |
Schedule of movement of accumulated other comprehensive income | Unrealized/ (realized) holding gain Foreign on available- currency for-sale translation investments Total Note RMB’000 RMB’000 RMB’000 Balance as of January 1, 2017 (189) 905 716 Other comprehensive (loss)/income before reclassification 2,748 (4,195) (1,447) Amounts reclassified from accumulated other comprehensive income — 3,290 3,290 Balance as of December 31, 2017 2,559 — 2,559 Other comprehensive income/(loss) before reclassification (1,037) — (1,037) Amounts reclassified from accumulated other comprehensive income — — — Balance as of December 31, 2018 1,522 — 1,522 Balance as of December 31, 2018, in US$ 221 — 221 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
INCOME TAXES | |
Schedule of Loss from continuing operations before income tax expense | For the years ended December 31, 2016 2017 2018 RMB’000 RMB’000 RMB’000 US$’000 Non-PRC (128,184) (36,317) 21,495 3,128 PRC (781,840) (275,201) (47,297) (6,880) (910,024) (311,518) (25,802) (3,752) |
Schedule of income tax expense | For the years ended December 31, 2016 2017 2018 RMB’000 RMB’000 RMB’000 US$’000 Current 1,104 29,428 11 2 Deferred 3,125 30,220 — — 4,229 59,648 11 2 |
Schedule of reconciliation of tax computed by applying the statutory income tax rate to income tax (benefit) expense | For the years ended December 31, 2016 2017 2018 RMB’000 RMB’000 RMB’000 US$’000 Loss before income tax expense (910,024) (311,518) (25,802) (3,752) Income tax computed at PRC statutory tax rate of 25% (227,506) (77,881) (6,450) (938) Preferential tax rates 68,685 15,955 (7,031) (1,023) International rate differences 22,365 9,401 (4,732) (688) Additional 50%/75% tax deduction for qualified research and development expenses (9,915) (8,795) (7,228) (1,051) Non-deductible expenses 2,043 6,187 3,002 437 Effect of changes in tax rates on deferred taxes (61,978) (33,930) 101,502 14,763 Changes in the valuation allowance 210,535 148,711 (79,052) (11,498) Income tax expense 4,229 59,648 11 2 |
Schedule of the components of deferred tax assets and liabilities | For the years ended December 31, 2017 2018 (RMB’000) (RMB’000) (US$’000) Deferred tax assets: - Allowance for doubtful accounts 19,553 12,323 1,792 - Deferred revenue 4,895 2,407 350 - Accruals 25,256 25,993 3,781 - Tax losses 159,782 134,855 19,613 - Property and equipment 3,424 2,105 306 - Intangible assets 2,001 1,469 214 - Long-term investment impairment 1,500 960 140 - Impairment loss for long-lived assets 68,508 24,663 3,587 - Unrealized profit 71,760 71,868 10,453 Less: valuation allowance (356,679) (276,643) (40,236) Total Deferred tax assets — — — |
Schedule of roll-forward of accrued unrecognized tax expense | December 31, 2017 2018 RMB’000 RMB’000 US$’000 Beginning balance (8,273) (8,273) (1,203) Increase based on tax positions related to the current year — — — Ending balance (8,273) (8,273) (1,203) |
RELATED PARTY BALANCES AND TR_2
RELATED PARTY BALANCES AND TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
RELATED PARTY BALANCES AND TRANSACTIONS | |
Schedule of related party relationships | Name of Related Parties Relationship with the Company Mr. Wang Song The Co-Founder and Ex-director of the Company Ms. Kou Xiaohong The Co-Founder and Ex-director of the Company |
Schedule of related party balances | Mr. Wang Ms. Kou Song Xiaohong Total Balance as of January 1, 2016, and December 31 2016, 2017 — (18) (18) Expense paid on behalf of the Group (328) — (328) Expense Reimbursement payment 277 — 277 Balance as of December 31, 2018 (51) (18) (69) Balance as of December 31, 2018 (US$’000) (7) (3) (10) |
LOSS PER SHARE (Tables)
LOSS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
LOSS PER SHARE | |
Schedule of basic and diluted loss per share | For the Year Ended December 31, 2016 2017 2018 (RMB’000) (RMB’000) (RMB’000) (US$’000) Numerator: Net loss attributable to ordinary shareholders: (913,477) (369,161) (24,418) (3,551) Denominator: Number of shares outstanding, opening 400,165,607 421,522,374 425,150,082 425,150,082 Weighted average number of shares issued 20,702,130 4,067,372 1,659,485 1,659,485 Weighted average number of shares repurchased (12,678,015) — — — Weighted-average number of shares outstanding – Basic and diluted 408,189,722 425,589,746 426,809,567 426,809,567 Loss per share -Basic and diluted (2.24) (0.87) (0.06) (0.01) |
FAIR VALUE MEASUREMENT (Tables)
FAIR VALUE MEASUREMENT (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
FAIR VALUE MEASUREMENT | |
Schedule of reconciliation of assets measured at fair value on a recurring basis using significant unobservable inputs | Investment in the Investee D RMB’000 Fair value at January 1, and December 31, 2016 3,973 Other than temporary impairment (3,973) Fair value at December 31, 2017 and 2018 — Fair value at December 31, 2018 (US$’000) — |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
COMMITMENTS AND CONTINGENCIES | |
Schedule of future minimum lease payments under non-cancelable operating leases | December 31, 2018 RMB’000 US$’000 2019 13,099 1,905 2020 5,982 870 2021 1,082 157 2022 1,114 162 2023 1,147 167 2024 1,886 274 24,310 3,535 |
CONDENSED FINANCIAL INFORMATI_2
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY | |
Schedule of condensed balance sheets | CONDENSED BALANCE SHEETS (Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”)) As of December 31, 2017 2018 RMB RMB US$ ASSETS: Current assets: Cash and cash equivalents 1,141 8,455 1,230 Prepaid expenses and other current assets 1,647 2,283 332 Total current assets 2,788 10,738 1,562 Non-current assets: Long term investments 20,045 20,045 2,915 Investments in subsidiaries and consolidated VIEs (514,022) (565,557) (82,257) Total non-current assets (493,977) (545,512) (79,342) TOTAL ASSETS (491,189) (534,774) (77,780) LIABILITIES AND SHAREHOLDERS’ DEFECIT: Current liabilities: Accrued expenses and other payables 7,398 1,489 217 Total current liabilities 7,398 1,489 217 Total liabilities 7,398 1,489 217 Shareholders’ deficit: Ordinary shares (US$0.0001 par value; 1,000,000,000 and 1,000,000,000 shares authorized; 426,267,345 and 429,404,977 shares issued and outstanding as of December 31, 2017 and 2018, respectively) 338 338 49 Additional paid-in capital 1,573,341 1,579,153 229,678 Treasury stock — (18,033) (2,623) Statutory reserves 1,326 1,326 193 Accumulated deficit (2,076,151) (2,100,569) (305,515) Accumulated other comprehensive income 2,559 1,522 221 Total shareholders’ deficit (498,587) (536,263) (77,997) TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT (491,189) (534,774) (77,780) |
Schedule of condensed statements of comprehensive loss | CONDENSED STATEMENTS OF COMPREHENSIVE LOSS (Amounts in thousands of RMB and US$) For the years ended December 31, 2016 2017 2018 RMB RMB RMB US$ General and administrative expenses (21,314) (10,986) (8,551) (1,244) Research and development expenses — — — — Impairment of long-term investments (12,240) (3,290) — — Operating loss (33,554) (14,276) (8,551) (1,244) Interest income 18 — 5 1 Other income 6,593 14,384 21,662 3,151 Foreign exchange gain/(loss) 14,209 (11,043) 4,200 611 Share of losses from subsidiaries and consolidated VIEs (900,743) (358,226) (41,734) (6,070) Loss before income taxes (913,477) (369,161) (24,418) (3,551) Income tax expense — — — — Net loss (913,477) (369,161) (24,418) (3,551) Foreign currency translation (293) 2,748 (1,037) (151) Unrealized gain/(loss) from available-for-sale investments 659 (4,195) — — Amounts reclassified from accumulated other comprehensive income (3,552) 3,290 — — Total other comprehensive (loss)/income, net of tax (3,186) 1,843 (1,037) (151) Comprehensive loss (916,663) (367,318) (25,455) (3,702) |
Schedule of condensed statements of cash flows | CONDENSED STATEMENTS OF CASH FLOWS (Amounts in thousands of RMB and US$) For the years ended December 31, 2016 2017 2018 RMB RMB RMB US$ Net cash used in operating activities (15,395) (22,514) (4,151) (604) Cash flows from investing activities: Cash paid for long term investments (1,842) — — — Cash received from sale of short-term investment 26,828 — — — Net cash provided by investing activities 24,986 — — — Cash flows from financing activities: Proceeds from employee share options exercised 5,427 — — — Payment for repurchase of ordinary shares (39,402) — — — Net cash used in financing activities (33,975) — — — Net (decrease)/increase in cash and cash equivalents (24,384) (22,514) 4,151 604 Cash and cash equivalents at beginning of the year 46,363 24,463 1,141 166 Effect of foreign exchange rate changes on cash 2,484 (808) 3,163 460 Cash and cash equivalents at end of the year 24,463 1,141 8,455 1,230 |
ORGANIZATION (Details)
ORGANIZATION (Details) | Dec. 19, 2016CNY (¥) | Jan. 20, 2016CNY (¥) | Nov. 16, 2015USD ($) | Nov. 16, 2015CNY (¥) | Sep. 23, 2005 | May 31, 2019 | Sep. 30, 2010 | Dec. 31, 2018CNY (¥)agreement | Dec. 31, 2017 |
Beijing Jingtian | Exclusive Business Cooperation Agreements | |||||||||
Organization | |||||||||
Service fees charged on percentage of net income | 100.00% | ||||||||
Beijing Blue IT | Exclusive technical support and service agreement/Exclusive technical consultation and training agreement/Equipment leasing agreement | |||||||||
Organization | |||||||||
Number of agreements with VIEs | agreement | 3 | ||||||||
Beijing Blue IT | Loan Agreements | |||||||||
Organization | |||||||||
Capital injection from a PRC company wholly owned by the Founders | ¥ 10,000,000 | ||||||||
Variable interest entity agreement term | 10 years | ||||||||
Variable interest entity renewed additional term | 10 years | ||||||||
ChinaCache Assets LLC ("CCAL") | |||||||||
Organization | |||||||||
Percentage of ownership | 100.00% | ||||||||
ChinaCache Networks Limited ("ChinaCache UK") | |||||||||
Organization | |||||||||
Percentage of ownership | 100.00% | ||||||||
Beijing Zhao Du | |||||||||
Organization | |||||||||
Percentage of ownership | 99.00% | ||||||||
Beijing Shuo Ge | |||||||||
Organization | |||||||||
Percentage of ownership | 99.00% | ||||||||
Beijing Shuo Ge | Subsequent event | |||||||||
Organization | |||||||||
Percentage of ownership, after transfer | 100.00% | ||||||||
Beijing Shou Ming | |||||||||
Organization | |||||||||
Percentage of ownership | 99.00% | ||||||||
ChinaCache Ireland Limited ("ChinaCache IE") | |||||||||
Organization | |||||||||
Percentage of ownership | 100.00% | ||||||||
Metasequoia Investment Inc. ("Metasequoia") | |||||||||
Organization | |||||||||
Percentage of ownership | 100.00% | ||||||||
Xin Run | |||||||||
Organization | |||||||||
Percentage of ownership | 99.00% | ||||||||
Percentage of ownership, after transfer | 99.00% | 99.00% | |||||||
Xin Run | ChinaCache Shouming | Loan Agreements | |||||||||
Organization | |||||||||
Variable interest entity agreement term | 10 years | ||||||||
Loan facility provided to the Nominee Shareholders of the variable interest entity | ¥ 10,000,000 | ||||||||
Xin Run | Tianjin Shuishan Technology Co., Ltd | |||||||||
Organization | |||||||||
Capital injection from a PRC company wholly owned by the Founders | $ 202,000 | ¥ 1,292,000 | |||||||
ChinaCache Networks Hong Kong Ltd. ("ChinaCache HK") | |||||||||
Organization | |||||||||
Percentage of ownership | 100.00% | ||||||||
JNet Holdings Limited ("JNet Holdings") | |||||||||
Organization | |||||||||
Percentage of ownership | 100.00% | ||||||||
ChinaCache North America, Inc. | |||||||||
Organization | |||||||||
Percentage of ownership | 100.00% | ||||||||
ChinaCache Beijing | |||||||||
Organization | |||||||||
Percentage of ownership | 100.00% | ||||||||
ChinaCache Beijing | Exclusive Business Cooperation Agreements | |||||||||
Organization | |||||||||
Variable interest entity agreement term | 10 years | ||||||||
ChinaCache Beijing | Beijing Jingtian | Loan Agreements | |||||||||
Organization | |||||||||
Variable interest entity agreement term | 10 years | ||||||||
Loan facility provided to the Nominee Shareholders of the variable interest entity | ¥ 8,500,000 | ||||||||
ChinaCache Beijing | Beijing Blue IT | Exclusive technical support and service agreement/Exclusive technical consultation and training agreement/Equipment leasing agreement | |||||||||
Organization | |||||||||
Variable interest entity agreement term | 5 years | ||||||||
Variable interest entity renewed additional term | 5 years | 5 years | |||||||
ChinaCache Beijing | Beijing Blue IT | Loan Agreements | |||||||||
Organization | |||||||||
Variable interest entity agreement term | 10 years | 10 years | |||||||
Interest-free loan facility | ¥ 20,000,000 | ¥ 10,000,000 |
ORGANIZATION - FINANCIAL INFORM
ORGANIZATION - FINANCIAL INFORMATION (Details) $ in Thousands | 12 Months Ended | |||||||
Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | ||
Organization | ||||||||
Pledge or collateralization of assets | ¥ 0 | |||||||
Current assets: | ||||||||
Cash and cash equivalents | $ 5,982 | 41,127,000 | ¥ 106,708,000 | |||||
Accounts receivable (net of allowance for doubtful accounts of RMB80,612 and RMB80,484 (US$11,706) as of December 31, 2017 and 2018, respectively) | 30,612 | 210,476,000 | 161,043,000 | |||||
Accounts receivable, allowance for doubtful accounts (in CNY and dollars) | 11,979 | ¥ 63,921,000 | 82,366,000 | $ 11,824 | 81,301,000 | |||
Prepaid expenses and other current assets | 24,672 | 169,635,000 | 212,984,000 | |||||
Amounts due from subsidiaries held for sale | 392 | 2,698,000 | 2,025,000 | |||||
Total current assets | 147,006 | 1,010,747,000 | 1,064,491,000 | |||||
Non-current assets: | ||||||||
Property and equipment, net | 60,369 | 415,067,000 | 53,326,000 | |||||
Intangible assets, net | 21 | 143,000 | 165,000 | |||||
Long term investments | 4,385 | 30,148,000 | 30,148,000 | |||||
Long term deposits and other non-current assets | 9,935 | 68,312,000 | 8,651,000 | |||||
Total non-current assets | 121,463 | 835,122,000 | 541,544,000 | |||||
Current liabilities: | ||||||||
Short-term borrowings | 2,014 | 13,850,000 | 9,960,000 | |||||
Accounts payable | 49,344 | 339,263,000 | 367,924,000 | |||||
Accrued employee benefits | 5,352 | 36,794,000 | 44,465,000 | |||||
Accrued expenses and other payables | 6,927 | 47,634,000 | 39,282,000 | |||||
Other payables | 204,184 | 1,403,854,000 | 1,254,375,000 | |||||
Income tax payable | 12,366 | 85,025,000 | 78,337,000 | |||||
Amounts due to subsidiaries held for sale | 107 | 737,000 | 737,000 | |||||
Current portion of capital lease obligations | 2,952 | 20,299,000 | 42,735,000 | |||||
Deferred government grant | 247 | 1,696,000 | 13,000,000 | |||||
Total current liabilities | 293,152 | 2,015,567,000 | 1,887,363,000 | |||||
Non-current liabilities: | ||||||||
Non-current portion of capital lease obligations | 6,015 | 41,359,000 | 1,421,000 | |||||
Deferred government grant | 2,087 | 14,350,000 | 6,580,000 | |||||
Total non-current liabilities | 53,854 | 370,280,000 | 219,579,000 | |||||
Net revenues | ||||||||
-Third party customers | 2,334 | ¥ 16,046,000 | ¥ 19,580,000 | |||||
Net (loss)/profit | (3,754) | (25,813,000) | (371,166,000) | (914,253,000) | ||||
Net cash provided by /(used in) operating activities | (6,059) | (41,659,000) | (99,039,000) | (187,180,000) | ||||
Net cash used in investing activities | (23,389) | (160,811,000) | (89,295,000) | (202,390,000) | ||||
Net cash used in financing activities | 20,449 | 140,596,000 | 149,007,000 | (84,645,000) | ||||
Consolidated Variable Interest Entity (VIEs) | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | 2,117 | 14,557,000 | 27,113,000 | |||||
Restricted cash | 461 | 3,169,000 | ||||||
Accounts receivable (net of allowance for doubtful accounts of RMB80,612 and RMB80,484 (US$11,706) as of December 31, 2017 and 2018, respectively) | 10,595 | 72,844,000 | 76,359,000 | |||||
Accounts receivable, allowance for doubtful accounts (in CNY and dollars) | 11,706 | 80,484,000 | 80,612,000 | |||||
Prepaid expenses and other current assets | 1,849 | 12,711,000 | 45,007,000 | |||||
Amounts due from inter-companies | 1,392 | 9,572,000 | 185,801,000 | |||||
Total current assets | 16,414 | 112,853,000 | 334,280,000 | |||||
Non-current assets: | ||||||||
Property and equipment, net | 333 | 2,291,000 | ||||||
Intangible assets, net | 5 | 35,000 | ||||||
Long term investments | 1,469 | 10,103,000 | 10,103,000 | |||||
Long term deposits and other non-current assets | 686 | 4,711,000 | 7,345,000 | |||||
Total non-current assets | 2,493 | 17,140,000 | 17,448,000 | |||||
TOTAL ASSETS | 18,907 | 129,993,000 | 351,728,000 | |||||
Current liabilities: | ||||||||
Short-term borrowings | 9,960,000 | |||||||
Accounts payable | 46,100 | 316,963,000 | 353,133,000 | |||||
Accrued employee benefits | 3,621 | 24,898,000 | 32,783,000 | |||||
Accrued expenses and other payables | 5,660 | 38,915,000 | 29,728,000 | |||||
Other payables | 2,192 | 15,072,000 | 15,547,000 | |||||
Income tax payable | 1,599 | 10,991,000 | 10,455,000 | |||||
Amounts due to inter-companies | [1] | 38,332 | 263,551,000 | 499,375,000 | ||||
Amounts due to subsidiaries held for sale | 107 | 737,000 | 737,000 | |||||
Current portion of capital lease obligations | 187 | 1,284,000 | 42,735,000 | |||||
Deferred government grant | 247 | 1,696,000 | 13,000,000 | |||||
Total current liabilities | 98,045 | 674,107,000 | 1,007,453,000 | |||||
Non-current liabilities: | ||||||||
Non-current portion of capital lease obligations | 0 | 0 | 1,421,000 | |||||
Deferred government grant | 2,087 | 14,350,000 | ||||||
Total non-current liabilities | 2,087 | 14,350,000 | 8,002,000 | |||||
Total liabilities | 100,132 | ¥ 688,457,000 | ¥ 1,015,455,000 | |||||
Net revenues | ||||||||
-Third party customers | 50,048 | 344,108,000 | 479,012,000 | 658,475,000 | ||||
-Inter-companies | 72,579 | 499,017,000 | 342,035,000 | 321,161,000 | ||||
Net (loss)/profit | $ 15,319 | ¥ 105,324,000 | ¥ (88,547,000) | ¥ (627,544,000) | ||||
[1] | Amount due from/to inter-companies consist of intercompany receivables/payables to the other companies within the Group. |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - LIQUIDITY (Details) | 12 Months Ended | ||||
Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2018CNY (¥) | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Net loss | $ 3,754,000 | ¥ 25,813,000 | ¥ 371,166,000 | ¥ 914,253,000 | |
Negative cash flows from operations | 6,059,000 | ¥ 41,659,000 | ¥ 99,039,000 | ¥ 187,180,000 | |
Net current liability | 146,146,000 | ¥ 1,004,820,000 | |||
Sales And Lease back Receivables | 11,636,000 | 80,000,000 | |||
Estimated Sale and Lease back receivable | $ 167,261,000 | ¥ 1,150,000,000 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONVENIENCE TRANSLATION (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Convenience translation | |
Noon buying rate (in CNY per dollar) | 6.8755 |
Optical Fibers | |
Property and equipment | |
Estimated useful lives of the assets | 20 years |
Computer equipment | Minimum | |
Property and equipment | |
Estimated useful lives of the assets | 3 years |
Computer equipment | Maximum | |
Property and equipment | |
Estimated useful lives of the assets | 15 years |
Furniture, fixtures and office equipment | |
Property and equipment | |
Estimated useful lives of the assets | 5 years |
Motor vehicles | |
Property and equipment | |
Estimated useful lives of the assets | 10 years |
Building | Minimum | |
Property and equipment | |
Estimated useful lives of the assets | 20 years |
Building | Maximum | |
Property and equipment | |
Estimated useful lives of the assets | 40 years |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - INTANGIBLE ASSETS (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Purchased software | |
Intangible assets | |
Estimated economic life of the intangible assets | 5 years |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - IMPAIRMENT OF LONG-LIVED ASSETS & INVESTMENT (Details) | 12 Months Ended | |||||
Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Jan. 01, 2018USD ($) | |
Impairment of long-lived assets | ||||||
Impairment of long-lived assets | ¥ 21,757,000 | ¥ 399,094,000 | ||||
Investments | ||||||
Impairment of available-for-sale investment | ¥ 0 | |||||
Impairment of cost method investment | ¥ 0 | 400,000 | ¥ 18,240,000 | |||
Accumulated deficit | ¥ (2,076,151,000) | $ (305,515,000) | ¥ (2,100,569,000) | |||
ASC 321 | ||||||
Investments | ||||||
Accumulated deficit | $ | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - REVENUE RECOGNITION (Details) ¥ in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||
Jun. 30, 2014 | Sep. 30, 2012 | Dec. 31, 2018USD ($)class | Dec. 31, 2018CNY (¥)class | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2018CNY (¥) | |
Net revenues | |||||||
Number of class of services in a portfolio of content and application delivery to total solutions | 1 | 1 | |||||
Accounts receivables and contract liabilities | |||||||
Accounts receivables | $ 30,612 | ¥ 161,043 | ¥ 210,476 | ||||
Advances from Customers | 2,705 | 10,361 | ¥ 18,598 | ||||
Disaggregation of revenue | 134,185 | ¥ 922,591 | 852,568 | ¥ 1,054,235 | |||
CDN Services | |||||||
Accounts receivables and contract liabilities | |||||||
Disaggregation of revenue | 103,192 | 709,498 | 669,938 | 927,903 | |||
IDC Services | |||||||
Accounts receivables and contract liabilities | |||||||
Disaggregation of revenue | 27,049 | 185,973 | 149,316 | 85,314 | |||
IX Services | |||||||
Accounts receivables and contract liabilities | |||||||
Disaggregation of revenue | $ 3,944 | ¥ 27,120 | ¥ 33,314 | ¥ 41,018 | |||
ChinaCache Beijing | All services | |||||||
Accounts receivables and contract liabilities | |||||||
Value-added tax | 6.00% | ||||||
Business tax rate (as a percent) | 5.00% | ||||||
Beijing Jingtian | All services | |||||||
Accounts receivables and contract liabilities | |||||||
Value-added tax | 6.00% | ||||||
Beijing Blue IT | All services | |||||||
Accounts receivables and contract liabilities | |||||||
Value-added tax | 6.00% | ||||||
Business tax rate (as a percent) | 3.00% | ||||||
Beijing Blue IT | Certain services | |||||||
Accounts receivables and contract liabilities | |||||||
Business tax rate (as a percent) | 5.00% |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - ADVERTISING, GOVERNMENT GRANT AND SEGMENT REPORTING (Details) | 12 Months Ended | |||
Dec. 31, 2018USD ($)segment | Dec. 31, 2018CNY (¥)segment | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | |
Advertising expenditures | ||||
Advertising expenditures, included in sales and marketing expenses | ¥ | ¥ 0 | ¥ 200,000 | ¥ 233,018 | |
Government Grant | ||||
-Third party customers | $ 2,334,000 | ¥ 16,046,000 | 19,580,000 | |
Segment reporting | ||||
Number of reportable segment | 1 | 1 | ||
Number of geographical segments | 0 | 0 | ||
Employee benefits | ||||
Employee benefits incurred under defined contribution plans | $ 4,260,000 | ¥ 29,288,000 | ¥ 44,416,000 | ¥ 53,669,000 |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - SHARE REPURCHASE PROGRAM (Details) | 12 Months Ended | ||||||
Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016USD ($)shares | Dec. 31, 2016CNY (¥)shares | Dec. 28, 2015USD ($) | Aug. 24, 2015USD ($) | Dec. 18, 2014USD ($) | |
Share Repurchase Program | |||||||
Share repurchase program, effective period | 12 months | ||||||
Shares repurchased, value | ¥ | ¥ 0 | ¥ 0 | ¥ 39,402,000 | ||||
ADS | 2014 Share Repurchase Plan | |||||||
Share Repurchase Program | |||||||
Repurchases authorized (in US$) | $ 10,000,000 | ||||||
ADS | August 2015 Share Repurchase Plan | |||||||
Share Repurchase Program | |||||||
Repurchases authorized (in US$) | $ 6,000,000 | ||||||
Number of shares repurchased | shares | 166,802 | 166,802 | |||||
Shares repurchased, value | $ 1,185,000 | ¥ 7,659,000 | |||||
ADS | December 2015 Share Repurchase Plan | |||||||
Share Repurchase Program | |||||||
Repurchases authorized (in US$) | $ 5,000,000 | ||||||
Number of shares repurchased | shares | 691,364 | 691,364 | |||||
Shares repurchased, value | $ 4,912,000 | ¥ 31,743,000 |
CONCENTRATION OF RISK (Details)
CONCENTRATION OF RISK (Details) | 12 Months Ended | |||
Dec. 31, 2018USD ($)item | Dec. 31, 2017CNY (¥) | Dec. 31, 2016 | Dec. 31, 2018CNY (¥)item | |
Credit risk | PRC | ||||
CONCENTRATION OF RISK | ||||
Amounts deposited with major financial institutions | $ 4,668,000 | ¥ 91,588,000 | ¥ 32,097,000 | |
Credit risk | HK | ||||
CONCENTRATION OF RISK | ||||
Amounts deposited with major financial institutions | 1,282,000 | 2,129,000 | 8,811,000 | |
Credit risk | United Kingdom | ||||
CONCENTRATION OF RISK | ||||
Amounts deposited with major financial institutions | 302,000 | 3,078,000 | 2,076,000 | |
Credit risk | Europe | ||||
CONCENTRATION OF RISK | ||||
Amounts deposited with major financial institutions | ¥ | 253,000 | 0 | ||
Credit risk | United States of America | ||||
CONCENTRATION OF RISK | ||||
Amounts deposited with major financial institutions | $ 530,000 | ¥ 9,661,000 | ¥ 3,646,000 | |
Supplier risk | Costs of bandwidth resources | ||||
CONCENTRATION OF RISK | ||||
Number of major PRC telecom carriers | item | 3 | 3 | ||
Supplier risk | Costs of bandwidth resources | Two major PRC telecom carriers | ||||
CONCENTRATION OF RISK | ||||
Percentage of concentration risk | 52.00% | 81.00% | 82.00% |
CONCENTRATION OF RISK - TOTAL R
CONCENTRATION OF RISK - TOTAL REVENUE & TOTAL ACCOUNTS RECEIVABLE (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2018CNY (¥) | |
CONCENTRATION OF RISK | |||||
Total revenues | $ 134,185 | ¥ 922,591 | ¥ 852,568 | ¥ 1,054,235 | |
Accounts receivables | $ 30,612 | ¥ 161,043 | ¥ 210,476 | ||
Minimum period for which the PRC government has been pursuing economic reform policies | 20 years | 20 years | |||
Percentage of depreciation of the RMB against US$ | 5.70% | 5.70% | 6.30% | 7.20% | |
Customer C | |||||
CONCENTRATION OF RISK | |||||
Total revenues | ¥ 118,970 | ||||
Revenues | Customer risk | Customer A | |||||
CONCENTRATION OF RISK | |||||
Total revenues | $ 73,257 | ¥ 503,676 | 317,260 | ¥ 346,764 | |
Revenues | Customer risk | Customer B | |||||
CONCENTRATION OF RISK | |||||
Total revenues | ¥ 94,974 | ||||
Accounts receivables | Customer risk | Customer A | |||||
CONCENTRATION OF RISK | |||||
Accounts receivables | $ 17,817 | ¥ 73,442 | ¥ 122,504 |
CASH, CASH EQUIVALENTS AND RE_2
CASH, CASH EQUIVALENTS AND RESTRICTED CASH - Cash and Cash Equivalents (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) |
CASH ,CASH EQUIVALENTS AND RESTRICTED CASH | |||
Cash and cash equivalents on the consolidated balance sheets | $ 5,982 | ¥ 41,127 | ¥ 106,708 |
CASH, CASH EQUIVALENTS AND RE_3
CASH, CASH EQUIVALENTS AND RESTRICTED CASH - Restricted Cash (Details) - Dec. 31, 2018 ¥ in Thousands, $ in Thousands | USD ($) | CNY (¥) |
CASH ,CASH EQUIVALENTS AND RESTRICTED CASH | ||
Restricted cash | $ 794 | ¥ 5,461 |
ACCOUNTS RECEIVABLE, NET (Detai
ACCOUNTS RECEIVABLE, NET (Details) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
Accounts receivable and allowance for doubtful accounts | ||||||
Accounts receivable | $ 42,591 | ¥ 292,842,000 | ¥ 242,344,000 | |||
Less: allowance for doubtful accounts | $ (11,824) | ¥ (81,301,000) | ¥ (63,921,000) | (11,979) | (82,366,000) | (81,301,000) |
Accounts receivable, net | $ 30,612 | 210,476,000 | ¥ 161,043,000 | |||
Analysis of the allowance for doubtful accounts | ||||||
Balance, beginning of year | 11,824 | 81,301,000 | 63,921,000 | |||
Additions for the current year | 977 | 6,719,000 | 18,432,000 | |||
Deductions for the current year - Recovery | (822) | (5,654,000) | (1,052,000) | |||
Balance, end of year | $ 11,979 | ¥ 82,366,000 | ¥ 81,301,000 | |||
Accounts receivable, pledged as collateral | ¥ 12,989,000 |
PREPAID EXPENSES AND OTHER CU_3
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
Prepaid expenses and other current assets: | ||||
Prepaid expense for bandwidth and servers | [1] | $ 1,380 | ¥ 9,491 | ¥ 4,029 |
Staff field advances | 87 | 596 | 525 | |
Capital lease deposit | 245 | 1,684 | 29,224 | |
Prepaid commission fee | [2] | 14,501 | 99,700 | 99,700 |
Prepaid service fee | 1,454 | 10,000 | 30,200 | |
Other deposit and receivables | [3] | 4,959 | 34,095 | 35,933 |
Prepaid income tax | 2,068 | 14,220 | 13,534 | |
Prepaid expense and other current assets | 24,694 | 169,786 | 213,145 | |
Provision of doubtful accounts | (22) | (151) | (161) | |
Prepaid expenses and other current assets, net | $ 24,672 | ¥ 169,635 | ¥ 212,984 | |
[1] | Prepaid expense for bandwidth and servers represents the unamortized portion of prepayments made to the Group's telecom operators and certain technology companies, who provide the Group with access to bandwidth and network servers. | |||
[2] | The balance represents the prepaid commission to an agent for the pending sales of certain cloud infrastructure that were held for sale (Note 10). | |||
[3] | Other deposit and receivables |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2018CNY (¥) | |
PROPERTY AND EQUIPMENT, NET | |||||
Property and equipment, at cost | $ 201,603 | ¥ 1,043,356 | ¥ 1,386,123 | ||
Less: accumulated depreciation | (82,588) | (587,032) | (567,835) | ||
Less: impairment | (58,646) | (402,998) | (403,221) | ||
Property and equipment, net | 60,369 | 53,326 | 415,067 | ||
Depreciation expenses | ¥ 12,017 | 9,145 | ¥ 155,225 | ||
Cost of revenues | |||||
PROPERTY AND EQUIPMENT, NET | |||||
Depreciation expenses | 1,745 | 11,999 | 8,090 | 130,724 | |
Sales and marketing expenses | |||||
PROPERTY AND EQUIPMENT, NET | |||||
Depreciation expenses | 4 | 138 | |||
General and administrative expenses | |||||
PROPERTY AND EQUIPMENT, NET | |||||
Depreciation expenses | 1 | 9 | 1,050 | 11,799 | |
Research and development expenses | |||||
PROPERTY AND EQUIPMENT, NET | |||||
Depreciation expenses | 1 | ¥ 9 | 1 | ¥ 12,564 | |
Optical Fibers | |||||
PROPERTY AND EQUIPMENT, NET | |||||
Property and equipment, at cost | 1,905 | 13,100 | 13,100 | ||
Computer equipment | |||||
PROPERTY AND EQUIPMENT, NET | |||||
Property and equipment, at cost | 146,164 | 928,293 | 1,004,948 | ||
Furniture, fixtures and office equipment | |||||
PROPERTY AND EQUIPMENT, NET | |||||
Property and equipment, at cost | 1,486 | 10,612 | 10,218 | ||
Leasehold improvements | |||||
PROPERTY AND EQUIPMENT, NET | |||||
Property and equipment, at cost | 2,732 | 18,769 | 18,782 | ||
Motor vehicles | |||||
PROPERTY AND EQUIPMENT, NET | |||||
Property and equipment, at cost | 1,431 | 10,157 | 9,842 | ||
Building | |||||
PROPERTY AND EQUIPMENT, NET | |||||
Property and equipment, at cost | 47,228 | 58,150 | 324,716 | ||
Freehold land | |||||
PROPERTY AND EQUIPMENT, NET | |||||
Property and equipment, at cost | $ 657 | ¥ 4,275 | ¥ 4,517 |
PROPERTY AND EQUIPMENT, NET - C
PROPERTY AND EQUIPMENT, NET - CARRYING AMOUNT (Details) | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016USD ($) |
PROPERTY AND EQUIPMENT, NET | |||||
Property and equipment held under capital leases, at cost | $ 44,446,000 | ¥ 305,589,000 | ¥ 241,589,000 | ||
Less: accumulated depreciation | (11,002,000) | (75,644,000) | (75,427,000) | ||
Less: impairment | (24,167,000) | (166,162,000) | (166,162,000) | ||
Property and equipment held under capital leases, net | 9,277,000 | 63,783,000 | |||
Depreciation of property and equipment held under capital leases | $ | 217,000 | $ 0 | $ 0 | ||
Property and equipment, pledged as collateral | ¥ | 298,232,000 | 0 | |||
Optical Fibers | |||||
PROPERTY AND EQUIPMENT, NET | |||||
Property and equipment held under capital leases, at cost | 1,905,000 | 13,100,000 | 13,100,000 | ||
Computer equipment | |||||
PROPERTY AND EQUIPMENT, NET | |||||
Property and equipment held under capital leases, at cost | $ 42,541,000 | ¥ 292,489,000 | ¥ 228,489,000 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2018CNY (¥) | |
Changes in intangible assets | |||||
Purchased software, net, beginning of year | ¥ 165,000 | ||||
Less: amortization | $ (115) | (791,000) | ¥ (2,371,000) | ¥ (3,869,000) | |
Less: impairment | 0 | ||||
Purchased software, net, end of year | 21 | 143,000 | 165,000 | ||
Estimated annual amortization expense for each of the five succeeding fiscal years | |||||
2019 | 9 | ¥ 64,000 | |||
2020 | 9 | 59,000 | |||
2021 | 1 | 8,000 | |||
2022 | 1 | 8,000 | |||
2023 | 1 | ¥ 4,000 | |||
Purchased software | |||||
Changes in intangible assets | |||||
Purchased software, net, beginning of year | 24 | 165,000 | |||
Addition | 6 | 42,000 | 993,000 | ||
Reclassified from assets held for sale (Note 9) | 4,258,000 | ||||
Less: amortization | (9) | (64,000) | (1,216,000) | ||
Less: impairment | (3,870,000) | ¥ (11,728,000) | |||
Purchased software, net, end of year | $ 21 | ¥ 143,000 | ¥ 165,000 |
LAND USE RIGHT (Details)
LAND USE RIGHT (Details) | 12 Months Ended | |||||
Dec. 31, 2018USD ($)a | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2013CNY (¥) | Dec. 31, 2018CNY (¥)a | |
LAND USE RIGHT | ||||||
Land Use Right, Gross | $ 4,953,000 | ¥ 34,057,000 | ¥ 34,057,000 | |||
Land Use Right, Accumulated Amortization | (274,000) | (1,155,000) | (1,885,000) | |||
Land use right, net | $ 4,679,000 | 32,902,000 | ¥ 32,172,000 | |||
Area of Land | a | 39,000 | 39,000 | ||||
Land use right, term of contract | 50 years | |||||
Amortization Expense for Land Use Right | $ 106,000 | ¥ 730,000 | 1,155,000 | ¥ 0 | ||
Payments to Acquire Land Held-for-use | ¥ 51,678,000 | |||||
Land use right, pledged as collateral | ¥ 32,902,000 | ¥ 32,172,000 |
ASSETS HELD FOR SALE _ LIABIL_3
ASSETS HELD FOR SALE / LIABILITIES HELD FOR SALE (Details) | Mar. 06, 2017CNY (¥)item | Nov. 27, 2015item | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2018CNY (¥) | Sep. 30, 2015CNY (¥)building |
Major classes of assets and liabilities held for sale | ||||||||
Assets held for sale | $ 84,554,000 | ¥ 581,731,000 | ¥ 581,350,000 | |||||
Liabilities held for sale | 1,162,000 | 3,888,000 | 7,991,000 | |||||
Property and equipment, gross | 201,603,000 | 1,043,356,000 | 1,386,123,000 | |||||
Xin Run | ||||||||
ASSETS HELD FOR SALE / LIABILITIES HELD FOR SALE [Line Items] | ||||||||
Percentage of equity interest to be sold | 79.00% | 60.00% | ||||||
Number of parties | item | 3 | |||||||
Consideration in cash for sale of equity interest | ¥ 221,000,000 | |||||||
Xin Run | Companies owned by the Founders | ||||||||
ASSETS HELD FOR SALE / LIABILITIES HELD FOR SALE [Line Items] | ||||||||
Percentage of equity interest to be sold | 52.67% | 38.00% | ||||||
Number of parties | item | 2 | |||||||
Xin Run | Assets/liabilities held-for-sale | ||||||||
Major classes of assets and liabilities held for sale | ||||||||
Cash and cash equivalents | 1,000 | 1,000 | ||||||
Prepaid expenses and other current assets | 2,252,000 | 15,478,000 | 15,478,000 | |||||
Amounts due from the Company | 107,000 | 737,000 | 737,000 | |||||
Property and equipment | 80,027,000 | 550,606,000 | ||||||
Land use right, net | 2,168,000 | 14,909,000 | 14,909,000 | |||||
Assets held for sale | 84,554,000 | 581,731,000 | 581,350,000 | |||||
Accrued expenses and other current liabilities | 770,000 | 1,863,000 | 5,293,000 | |||||
Amounts due to the Company | 392,000 | 2,025,000 | 2,698,000 | |||||
Liabilities held for sale | 1,162,000 | 3,888,000 | 7,991,000 | |||||
Property and equipment, gross | ¥ 39,927,000 | |||||||
Net revenue | ¥ 2,442,000 | |||||||
Loss before income taxes | (531,000) | ¥ (3,654,000) | (3,000,000) | (107,399,000) | ||||
Loss before income taxes attributable to the noncontrolling interest | $ 5,000 | ¥ 36,000 | ¥ 30,000 | ¥ 1,074,000 | ||||
Xin Run | Assets/liabilities held-for-sale | Framework agreement [Member] | ||||||||
ASSETS HELD FOR SALE / LIABILITIES HELD FOR SALE [Line Items] | ||||||||
Consideration in cash for sale of equity interest | ¥ 325,000,000 | |||||||
Xin Run | Assets/liabilities held-for-sale | BFSMC | Definitive Sale and Leaseback Agreement [Member] | ||||||||
ASSETS HELD FOR SALE / LIABILITIES HELD FOR SALE [Line Items] | ||||||||
Consideration in cash for sale of equity interest | ¥ 960,000,000 | |||||||
Major classes of assets and liabilities held for sale | ||||||||
Number of IDC buildings | building | 2 | |||||||
Xin Run | Assets/liabilities held-for-sale | BFSMC | Supplementary agreement [Member] | ||||||||
ASSETS HELD FOR SALE / LIABILITIES HELD FOR SALE [Line Items] | ||||||||
Consideration in cash for sale of equity interest | ¥ 672,000,000 |
CLOUD INFRASTRUCTURE CONSTRUC_3
CLOUD INFRASTRUCTURE CONSTRUCTION IN PROGRESS (Details) | 12 Months Ended | ||||
Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2016CNY (¥) | |
Major classes of assets and liabilities held for sale | |||||
Cloud infrastructure construction in progress | $ 42,074,000 | ¥ 416,352,000 | ¥ 289,280,000 | ||
Costs capitalized | ¥ 977,194,000 | ||||
Additional investment | 48,419,000 | ¥ 332,906,000 | 35,841,000 | ||
Property, Plant and Equipment, Gross | 201,603,000 | 1,043,356,000 | 1,386,123,000 | ||
Capital Leased Assets, Gross | 44,446,000 | 241,589,000 | 305,589,000 | ||
Building | |||||
Major classes of assets and liabilities held for sale | |||||
Costs capitalized | 1,013,035,000 | ||||
Property, Plant and Equipment, Gross | 47,228,000 | 58,150,000 | 324,716,000 | ||
Equipment | |||||
Major classes of assets and liabilities held for sale | |||||
Property, Plant and Equipment, Gross | 15,137,000 | 104,078,000 | |||
Other noncurrent assets | |||||
Major classes of assets and liabilities held for sale | |||||
Property, Plant and Equipment, Gross | 13,254,000 | 91,128,000 | |||
Xin Run | Assets/liabilities held-for-sale | |||||
Major classes of assets and liabilities held for sale | |||||
Property and equipment | $ 80,027,000 | ¥ 550,606,000 | |||
Property, Plant and Equipment, Gross | ¥ 39,927,000 |
LONG TERM INVESTMENTS (Details)
LONG TERM INVESTMENTS (Details) $ in Thousands | Feb. 19, 2014CNY (¥) | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2013CNY (¥)shares | Dec. 31, 2011CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Aug. 25, 2014CNY (¥) |
LONG TERM INVESTMENTS | |||||||||||
Less: accumulated impairment | $ (3,289) | ¥ (22,613,000) | ¥ (22,613,000) | ||||||||
Long term Investments | 4,385 | 30,148,000 | 30,148,000 | ||||||||
Additional investment | 48,419 | ¥ 332,906,000 | ¥ 35,841,000 | ||||||||
PRC Fund | |||||||||||
LONG TERM INVESTMENTS | |||||||||||
Long term cost investments | 1,469 | ¥ 10,103,000 | 10,103,000 | 10,103,000 | |||||||
Long term investments, number of years of investment | 9 years | ||||||||||
United States Fund | |||||||||||
LONG TERM INVESTMENTS | |||||||||||
Long term cost investments | 2,916 | 20,045,000 | 20,045,000 | ||||||||
Additional investment | $ 53 | ¥ 361,000 | |||||||||
Investment in Flashapp Inc. ("Flashapp") | |||||||||||
LONG TERM INVESTMENTS | |||||||||||
Long term cost investments | 1,780 | 12,240,000 | 12,240,000 | ||||||||
Other than temporary impairment of cost method investments | ¥ 12,240,000 | ||||||||||
Investment in Flashapp Inc. ("Flashapp") | Series A Preferred Shares | |||||||||||
LONG TERM INVESTMENTS | |||||||||||
Number of units or shares purchased of cost method investments | shares | 13,971,428 | ||||||||||
Cost of investment of cost method investments | ¥ 12,240,000 | ||||||||||
Redemption price as a percentage of original issuance price of cost method investments | 120.00% | ||||||||||
Investee A | |||||||||||
LONG TERM INVESTMENTS | |||||||||||
Long term cost investments | 873 | 6,000,000 | 6,000,000 | ||||||||
Percentage of interest in cost method investments | 6.25% | ||||||||||
Cost of investment of cost method investments | ¥ 6,000,000 | ||||||||||
Other than temporary impairment of cost method investments | ¥ 6,000,000 | ||||||||||
Investee B | |||||||||||
LONG TERM INVESTMENTS | |||||||||||
Long term cost investments | 58 | 400,000 | ¥ 400,000 | ||||||||
Investee D | |||||||||||
LONG TERM INVESTMENTS | |||||||||||
Long term available-for-sale investments, before accumulated impairment | $ 578 | $ 506 | ¥ 3,973,000 | ||||||||
Percentage of interest in cost method investments | 2.00% | ||||||||||
Cost of available-for-sale investment | ¥ 3,068,000 | ||||||||||
Term of debt | 2 years | ||||||||||
Investee D | Maximum | |||||||||||
LONG TERM INVESTMENTS | |||||||||||
Conversion price as a percentage of Series A financing price | 25.00% |
BORROWINGS - SHORT TERM LOAN (D
BORROWINGS - SHORT TERM LOAN (Details) | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 29, 2018USD ($) | Dec. 29, 2018CNY (¥) | Oct. 11, 2018USD ($) | Oct. 11, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Nov. 14, 2017CNY (¥) | Sep. 07, 2017 |
Short-term Debt [Line Items] | |||||||||
Bank loan | $ 2,014,000 | ¥ 13,850,000 | ¥ 9,960,000 | ||||||
Other borrowing | 2,014,000 | 13,850,000 | |||||||
Total | $ 2,014,000 | ¥ 13,850,000 | ¥ 9,960,000 | ||||||
Interest rate (as a percent) | 4.90% | ||||||||
Jiangsu Bank (Beijing) | |||||||||
Short-term Debt [Line Items] | |||||||||
Bank loan | ¥ 9,960,000 | ||||||||
Interest rate (as a percent) | 7.395% | ||||||||
Third-party A | |||||||||
Short-term Debt [Line Items] | |||||||||
Bank loan | $ 73,000 | ¥ 500,000 | $ 1,723,000 | ¥ 11,850,000 | |||||
Interest rate (as a percent) | 12.00% | 12.00% | |||||||
Third-party B | |||||||||
Short-term Debt [Line Items] | |||||||||
Bank loan | $ 218,000 | ¥ 1,500,000 | |||||||
Interest rate (as a percent) | 12.00% | 12.00% |
BORROWINGS - LONG TERM LOAN (De
BORROWINGS - LONG TERM LOAN (Details) | Jun. 15, 2018USD ($) | Jun. 15, 2018CNY (¥) | May 14, 2018USD ($) | May 14, 2018CNY (¥) | Jan. 15, 2018USD ($) | Jan. 15, 2018CNY (¥) | Dec. 21, 2017CNY (¥) | Dec. 14, 2017CNY (¥) | Sep. 07, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2018CNY (¥) | Jan. 30, 2018USD ($) | Jan. 30, 2018CNY (¥) | Dec. 13, 2017CNY (¥) | Nov. 07, 2017CNY (¥) | Oct. 30, 2017CNY (¥) | Sep. 07, 2017CNY (¥) |
Debt Instrument [Line Items] | |||||||||||||||||||||
Proceeds from Bank Debt | $ 29,591,000 | ¥ 203,450,000 | ¥ 411,745,000 | ¥ 29,311,000 | |||||||||||||||||
Interest rate (as a percent) | 4.90% | ||||||||||||||||||||
Long-term bank loan | ¥ 209,598,000 | 54,239,000 | 209,598,000 | ¥ 372,926,000 | |||||||||||||||||
Long-term other borrowing | 34,622,000 | 34,622,000 | |||||||||||||||||||
Loans Payable, Noncurrent, Total | 211,578,000 | 45,752,000 | 211,578,000 | 314,571,000 | |||||||||||||||||
Future installment repayment | |||||||||||||||||||||
2019 | 11,636,000 | 80,000,000 | |||||||||||||||||||
2020 | 29,089,000 | 200,000,000 | |||||||||||||||||||
2021 | 11,636,000 | 80,000,000 | |||||||||||||||||||
2022 | 2,909,000 | 20,000,000 | |||||||||||||||||||
Total | 55,270,000 | 380,000,000 | |||||||||||||||||||
Payments of Financing Costs | $ 1,105,000 | ¥ 7,599,000 | 4,900,000 | ||||||||||||||||||
Bank B and C | Secured Debt | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Long-term bank loan | 449,254,000 | ¥ 449,254,000 | ¥ 567,384,000 | ||||||||||||||||||
Bank of Fushun [Member] | Three-year credit facility | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Interest rate (as a percent) | 8.00004% | ||||||||||||||||||||
Long-term Line of Credit | $ 3,927,000 | ¥ 27,000,000 | ¥ 23,000,000 | ¥ 150,000,000 | ¥ 150,000,000 | ||||||||||||||||
Future installment repayment | |||||||||||||||||||||
Debt Instrument, Face Amount | 240,000,000 | ||||||||||||||||||||
Payments of Financing Costs | ¥ 2,400,000 | ||||||||||||||||||||
Line of Credit facility, Capital Expenditure | ¥ 90,000,000 | ||||||||||||||||||||
Shenyang Rural Commercial Bank [Member] | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Interest rate (as a percent) | 30.00% | ||||||||||||||||||||
Future installment repayment | |||||||||||||||||||||
Debt Instrument, Face Amount | ¥ 220,000,000 | ||||||||||||||||||||
Payments of Financing Costs | $ 13,090,000 | ¥ 90,000,000 | $ 2,909,000 | ¥ 20,000,000 | $ 7,272,000 | ¥ 50,000,000 | ¥ 40,000,000 | ¥ 6,775,000 | |||||||||||||
Financial Institution A | Three-year credit facility | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Long-term bank loan | ¥ 38,784,000 | ||||||||||||||||||||
Financial Institution B | |||||||||||||||||||||
Future installment repayment | |||||||||||||||||||||
Interest Expense, Debt | $ | $ 1,000,000 |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |||
Advance from customers | $ 2,705 | ¥ 18,598 | ¥ 10,361 |
Other accrued expenses | 3,164 | 21,764 | 26,876 |
Other tax payables | 1,058 | 7,272 | 2,045 |
Accrued expenses and other current liabilities | $ 6,927 | ¥ 47,634 | ¥ 39,282 |
OTHER PAYABLES (Details)
OTHER PAYABLES (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) |
OTHER PAYABLES | |||
Payables for purchase of property and equipment | $ 57,202 | ¥ 393,287 | ¥ 257,375 |
Consideration received for disposal of Zhaodu and Shuoge | 145,008 | 997,000 | 997,000 |
Other Payables | 1,974 | 13,567 | |
Total | $ 204,184 | ¥ 1,403,854 | ¥ 1,254,375 |
DEFERRED GOVERNMENT GRANT (Deta
DEFERRED GOVERNMENT GRANT (Details) | 12 Months Ended | |||
Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2018CNY (¥) | |
Deferred government grant | ||||
Beginning Balance | $ 2,848,000 | ¥ 24,208,000 | ||
Recognized as income during the year | (514,000) | ¥ (3,534,000) | (4,628,000) | |
Total balance of deferred government grant | 2,334,000 | 16,046,000 | 19,580,000 | |
Less: current portion | 247,000 | 13,000,000 | ¥ 1,696,000 | |
Balance of non-current deferred government grant | 2,087,000 | ¥ 14,350,000 | ||
Prepaid Discount Made to Buyer for Pending Sales of Certain Cloud Infrastructure | $ 514,000 | ¥ 4,628,000 | ¥ 3,534,000 |
CAPITAL LEASE OBLIGATIONS (Deta
CAPITAL LEASE OBLIGATIONS (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) |
Future minimum lease payments under non-cancellable capital lease arrangements | |||
2018 | ¥ 43,587 | ||
2019 | $ 3,681 | ¥ 25,311 | 1,439 |
2020 | 3,491 | 24,003 | |
2021 | 3,127 | 21,503 | |
Total minimum lease payment | 10,299 | 70,817 | 45,026 |
Less: amount representing interest | (1,332) | (9,159) | (870) |
Present value of remaining minimum lease payment | 8,967 | 61,658 | 44,156 |
Non current portion | $ 6,015 | ¥ 41,359 | ¥ 1,421 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) | 12 Months Ended | ||||||
Dec. 31, 2018item$ / sharesshares | Dec. 31, 2017$ / sharesshares | Dec. 31, 2016$ / sharesshares | Jun. 20, 2011shares | May 20, 2010shares | May 28, 2009shares | Oct. 16, 2008shares | |
SHARE-BASED COMPENSATION | |||||||
Options granted (in shares) | 17,600,000 | 15,080,000 | 0 | ||||
Options to purchase ordinary shares, outstanding (in shares) | 37,369,229 | ||||||
Number of ordinary shares available for future grant | 16,222,688 | ||||||
Maximum | |||||||
SHARE-BASED COMPENSATION | |||||||
Exercise price (in CNY or dollars per share) | $ / shares | $ 0.07 | $ 0.07 | $ 0.07 | ||||
Minimum | |||||||
SHARE-BASED COMPENSATION | |||||||
Exercise price (in CNY or dollars per share) | $ / shares | $ 0.06 | $ 0.06 | $ 0.06 | ||||
2007 Plan | |||||||
SHARE-BASED COMPENSATION | |||||||
Aggregate number of shares that can be purchased | 14,000,000 | ||||||
2008 Plan | |||||||
SHARE-BASED COMPENSATION | |||||||
Aggregate number of shares that can be purchased | 8,600,000 | ||||||
2010 Plan | |||||||
SHARE-BASED COMPENSATION | |||||||
Aggregate number of shares that can be purchased | 9,000,000 | ||||||
2010 Plan | Maximum | |||||||
SHARE-BASED COMPENSATION | |||||||
Expiration term of options granted | 10 years | ||||||
2010 Plan | Minimum | |||||||
SHARE-BASED COMPENSATION | |||||||
Expiration term of options granted | 7 years | ||||||
2010 Plan | Vesting schedule one | |||||||
SHARE-BASED COMPENSATION | |||||||
Percentage of options vesting on the stated vesting commencement date | 100.00% | ||||||
2010 Plan | Vesting schedule two | |||||||
SHARE-BASED COMPENSATION | |||||||
Percentage of options vesting on the second anniversary of the stated vesting commencement date | 25.00% | ||||||
Percentage of options vesting on the third anniversary of the stated vesting commencement date | 25.00% | ||||||
Percentage of options vesting on the fourth anniversary of the stated vesting commencement date | 25.00% | ||||||
Percentage of options vesting on the first anniversary of the stated vesting commencement date | 25.00% | ||||||
2010 Plan | Vesting schedule three | |||||||
SHARE-BASED COMPENSATION | |||||||
Percentage of options vesting on the first anniversary of the stated vesting commencement date | 25.00% | ||||||
Percentage of options vesting each quarter for the second anniversary of the stated vesting commencement date | 6.25% | ||||||
Percentage of options vesting each quarter for the third anniversary of the stated vesting commencement date | 6.25% | ||||||
Percentage of options vesting each quarter for the fourth anniversary of the stated vesting commencement date | 6.25% | ||||||
2011 Plan | |||||||
SHARE-BASED COMPENSATION | |||||||
Aggregate number of shares that can be purchased | 22,000,000 | ||||||
Number of different vesting schedules | item | 4 | ||||||
2011 Plan | Maximum | |||||||
SHARE-BASED COMPENSATION | |||||||
Expiration term of options granted | 10 years | ||||||
2011 Plan | Minimum | |||||||
SHARE-BASED COMPENSATION | |||||||
Expiration term of options granted | 6 years | ||||||
2011 Plan | Vesting schedule one | |||||||
SHARE-BASED COMPENSATION | |||||||
Percentage of options vesting on the stated vesting commencement date | 100.00% | ||||||
2011 Plan | Vesting schedule two | |||||||
SHARE-BASED COMPENSATION | |||||||
Percentage of options vesting on the second anniversary of the stated vesting commencement date | 25.00% | ||||||
Percentage of options vesting on the third anniversary of the stated vesting commencement date | 25.00% | ||||||
Percentage of options vesting on the fourth anniversary of the stated vesting commencement date | 25.00% | ||||||
Percentage of options vesting on the first anniversary of the stated vesting commencement date | 25.00% | ||||||
2011 Plan | Vesting schedule three | |||||||
SHARE-BASED COMPENSATION | |||||||
Percentage of options vesting on the first anniversary of the stated vesting commencement date | 25.00% | ||||||
Percentage of options vesting each quarter for the second anniversary of the stated vesting commencement date | 6.25% | ||||||
Percentage of options vesting each quarter for the fourth anniversary of the stated vesting commencement date | 6.25% | ||||||
2011 Plan | Vesting schedule four | |||||||
SHARE-BASED COMPENSATION | |||||||
Percentage of options vesting on the second anniversary of the stated vesting commencement date | 33.00% | ||||||
Percentage of options vesting on the third anniversary of the stated vesting commencement date | 33.00% | ||||||
Percentage of options vesting on the first anniversary of the stated vesting commencement date | 33.00% | ||||||
2011 Plan | Options | Vesting schedule three | |||||||
SHARE-BASED COMPENSATION | |||||||
Percentage of options vesting each quarter for the third anniversary of the stated vesting commencement date | 6.25% | ||||||
2007 and 2008 Option Plans | Vesting schedule one | |||||||
SHARE-BASED COMPENSATION | |||||||
Percentage of options vesting on the stated vesting commencement date | 100.00% | ||||||
2007 and 2008 Option Plans | Vesting schedule two | |||||||
SHARE-BASED COMPENSATION | |||||||
Percentage of options vesting on the second anniversary of the stated vesting commencement date | 50.00% | ||||||
Percentage of options vesting on the third anniversary of the stated vesting commencement date | 25.00% | ||||||
Percentage of options vesting on the fourth anniversary of the stated vesting commencement date | 25.00% |
SHARE-BASED COMPENSATION - STOC
SHARE-BASED COMPENSATION - STOCK OPTION ACTIVITY & OPTION PRICING MODEL (Details) | 12 Months Ended | ||||||
Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2018CNY (¥)shares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2017CNY (¥)shares | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2016CNY (¥)shares | Dec. 31, 2018CNY (¥)shares | |
Number of options | |||||||
Granted (in shares) | shares | 17,600,000 | 17,600,000 | 15,080,000 | 15,080,000 | 0 | 0 | |
Exercised (in shares) | shares | (1,096,896) | (1,096,896) | (1,325,241) | (1,325,241) | |||
Outstanding at the end of the period (in shares) | shares | 37,369,229 | 37,369,229 | |||||
Minimum | |||||||
Weighted average Exercise price | |||||||
Granted (in dollars per shares) | $ 0.06 | $ 0.06 | $ 0.06 | ||||
Aggregate intrinsic value | |||||||
Period over which unrecognized share-based compensation cost are expected to be recognized | 2 years | 2 years | |||||
Maximum | |||||||
Weighted average Exercise price | |||||||
Granted (in dollars per shares) | $ 0.07 | $ 0.07 | $ 0.07 | ||||
Aggregate intrinsic value | |||||||
Period over which unrecognized share-based compensation cost are expected to be recognized | 4 years | 4 years | |||||
ADS | |||||||
Aggregate intrinsic value | |||||||
Closing price of ordinary shares (in dollars per share) | $ 1.06 | ||||||
Ordinary shares | |||||||
Aggregate intrinsic value | |||||||
Closing price of ordinary shares (in dollars per share) | $ 0.07 | ||||||
Options | Employees | |||||||
Number of options | |||||||
Outstanding at the beginning of the period (in shares) | shares | 25,113,357 | 25,113,357 | 10,938,077 | 10,938,077 | |||
Vested and expected to vest at the beginning of the period (in shares) | shares | 25,113,357 | 25,113,357 | 10,938,077 | 10,938,077 | |||
Granted (in shares) | shares | 17,600,000 | 17,600,000 | 15,080,000 | 15,080,000 | |||
Exercised (in shares) | shares | (1,096,896) | (1,096,896) | |||||
Forfeited (in shares) | shares | (4,247,232) | (4,247,232) | (904,720) | (904,720) | |||
Outstanding at the end of the period (in shares) | shares | 37,369,229 | 37,369,229 | 25,113,357 | 25,113,357 | 10,938,077 | 10,938,077 | |
Vested and expected to vest at the end of the period (in shares) | shares | 37,369,229 | 37,369,229 | 25,113,357 | 25,113,357 | 10,938,077 | 10,938,077 | |
Exercisable at the end of the period (in shares) | shares | 16,222,688 | 16,918,975 | 16,222,688 | ||||
Weighted average Exercise price | |||||||
Outstanding at the beginning of the period (in dollars per shares) | $ 0.14 | $ 0.25 | |||||
Vested and expected to vest at the beginning of the period (in dollars per shares) | 0.14 | 0.25 | |||||
Granted (in dollars per shares) | 0.06 | ||||||
Exercised (in dollars per shares) | 0.08 | 0.07 | |||||
Forfeited (in dollars per shares) | 0.06 | 0.27 | |||||
Outstanding at the end of the period (in dollars per shares) | 0.11 | 0.14 | $ 0.25 | ||||
Vested and expected to vest at the end of the period (in dollars per shares) | 0.11 | 0.14 | $ 0.25 | ||||
Exercisable at the end of the period (in dollars per shares) | $ 0.17 | $ 0.22 | |||||
Weighted average remaining contractual term (Years) | |||||||
Outstanding at the end of the period | 7 years 9 months 22 days | 7 years 9 months 22 days | 7 years 3 months 4 days | 7 years 3 months 4 days | 4 years 7 months 2 days | 4 years 7 months 2 days | |
Vested and expected to vest at the end of the period | 7 years 9 months 22 days | 7 years 9 months 22 days | 7 years 3 months 4 days | 7 years 3 months 4 days | 4 years 7 months 2 days | 4 years 7 months 2 days | |
Exercisable at the end of the period | 5 years 11 months 5 days | 5 years 11 months 5 days | 6 years 1 month 21 days | 6 years 1 month 21 days | |||
Aggregate intrinsic value | |||||||
Outstanding at the beginning of the period (in dollars) | $ | $ 586,000 | $ 76,000 | |||||
Vested and expected to vest at the beginning of the period (in dollars) | $ | 586,000 | 76,000 | |||||
Vested and expected to vest at the end of the period (in dollars) | $ | 2,000 | 586,000 | $ 76,000 | ||||
Exercisable at the end of the period (in dollars) | $ | 2,000 | 312,000 | |||||
Outstanding at the end of the period (in dollars) | $ | 2,000 | $ 586,000 | $ 76,000 | ||||
Total intrinsic value of stock options exercised | ¥ | ¥ 502,000 | ¥ 0 | ¥ 3,132,000 | ||||
Unrecognized share-based compensation cost (in CNY or dollars) | $ 414,000 | ¥ 2,849,000 | |||||
Assumptions used in calculation of estimated fair value of options | |||||||
Risk-free interest rates (as a percent) | 2.78% | 2.78% | |||||
Expected volatility (as a percent) | 88.00% | 88.00% | |||||
Expected dividend yield (as a percent) | 0.00% | 0.00% | |||||
Weighted average fair value of share option (in dollars per share) | $ 0.0469 | ||||||
Total fair value of options vested | $ 584,000 | ¥ 4,013,000 | ¥ 2,054,000 | ¥ 590,000 | |||
Options | Employees | Minimum | |||||||
Assumptions used in calculation of estimated fair value of options | |||||||
Suboptimal exercise factor | 2.2 | 2.2 | |||||
Options | Employees | Maximum | |||||||
Assumptions used in calculation of estimated fair value of options | |||||||
Suboptimal exercise factor | $ | 2.8 |
SHARE-BASED COMPENSATION - REST
SHARE-BASED COMPENSATION - RESTRICTED SHARES AWARD (Details) | Apr. 09, 2018shares | Dec. 13, 2017shares | Dec. 11, 2015shares | Dec. 23, 2014shares | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2018CNY (¥)shares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2017CNY (¥)shares | Dec. 31, 2016$ / sharesshares | Dec. 31, 2016CNY (¥)shares | Dec. 31, 2018CNY (¥)shares |
Number of ordinary shares | |||||||||||
Outstanding at the beginning of the period (in shares) | 7,901,127 | 7,901,127 | |||||||||
Granted (in shares) | 480,000 | 480,000 | |||||||||
Vested (in shares) | (1,503,212) | (1,503,212) | (20,555,835) | (20,555,835) | |||||||
Forfeited (in shares) | (560,256) | (560,256) | (1,935,168) | (1,935,168) | |||||||
Outstanding at the end of the period (in shares) | 640,000 | 640,000 | 7,901,127 | ||||||||
Expected to vest at the end of the period (in shares) | 640,000 | 2,223,468 | 7,901,127 | 640,000 | |||||||
Weighted average grant date fair value | |||||||||||
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 0.46 | ||||||||||
Granted (in dollars per share) | $ / shares | $ 0.07 | ||||||||||
Vested (in dollars per share) | $ / shares | 0.35 | 0.16 | |||||||||
Forfeited (in dollars per share) | $ / shares | 0.43 | 0.45 | |||||||||
Outstanding at the end of the period (in dollars per share) | $ / shares | 0.07 | $ 0.46 | |||||||||
Expected to vest at the end of the period (in dollars per share) | $ / shares | $ 0.07 | $ 0.14 | $ 0.46 | ||||||||
Aggregate fair value of the unvested restricted shares | $ 44,000 | ¥ 300,000 | $ 183,000 | ¥ 1,187,448 | |||||||
Total fair value of restricted shares vested | $ 21,000 | ¥ 144,000 | ¥ 8,882,000 | ¥ 84,435,000 | |||||||
Restricted shares | |||||||||||
Number of ordinary shares | |||||||||||
Outstanding at the beginning of the period (in shares) | 2,223,468 | 2,223,468 | |||||||||
Granted (in shares) | 16,813,344 | 16,813,344 | |||||||||
Outstanding at the end of the period (in shares) | 2,223,468 | 2,223,468 | |||||||||
Weighted average grant date fair value | |||||||||||
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 0.14 | ||||||||||
Granted (in dollars per share) | $ / shares | $ 0.07 | ||||||||||
Outstanding at the end of the period (in dollars per share) | $ / shares | $ 0.14 | ||||||||||
2011 Plan | Restricted shares | Employees and directors | |||||||||||
SHARE-BASED COMPENSATION | |||||||||||
Shares issued (in shares) | 480,000 | 16,813,344 | 40,106,656 | 11,265,520 | |||||||
Unrecognized share-based compensation cost | $ 44,000 | ¥ 300,000 | |||||||||
Period over which unrecognized share-based compensation cost are expected to be recognized | 2 years | 2 years |
SHARE-BASED COMPENSATION - SHAR
SHARE-BASED COMPENSATION - SHARE OPTIONS ISSUED TO NON-EMPLOYEES (Details) | Dec. 31, 2018$ / sharesshares |
ADS | |
SHARE-BASED COMPENSATION | |
Closing price of ordinary shares (in dollars per share) | $ 1.06 |
Ordinary shares | |
SHARE-BASED COMPENSATION | |
Closing price of ordinary shares (in dollars per share) | $ 0.07 |
Options | Non-employees | |
SHARE-BASED COMPENSATION | |
Options outstanding with exercise price below the closing price of the entity's ordinary share (in shares) | shares | 0 |
SHARE-BASED COMPENSATION - RE_2
SHARE-BASED COMPENSATION - RESTRICTED SHARE AWARD GRANTED TO NON-EMPLOYEE (Details) | 12 Months Ended | ||||
Dec. 31, 2018USD ($)shares | Dec. 31, 2018CNY (¥)shares | Dec. 31, 2017CNY (¥)shares | Dec. 31, 2016USD ($)shares | Dec. 31, 2016CNY (¥)shares | |
Share-based compensation | |||||
Granted (in shares) | 480,000 | 480,000 | |||
Vested (in shares) | 1,503,212 | 1,503,212 | 20,555,835 | ||
Total fair value of restricted shares vested | $ 21,000 | ¥ 144,000 | ¥ 8,882,000 | ¥ 84,435,000 | |
Total compensation expense | 604,000 | 4,157,000 | 10,936,000 | ¥ 85,025,000 | |
RSUs | Non-employees | |||||
Share-based compensation | |||||
Granted (in shares) | 454,912 | 454,912 | |||
Cost of revenues | |||||
Share-based compensation | |||||
Total compensation expense | 80,000 | 551,000 | 490,000 | ¥ 5,961,000 | |
Sales and marketing expenses | |||||
Share-based compensation | |||||
Total compensation expense | 32,000 | 220,000 | 254,000 | 2,753,000 | |
General and administrative expenses | |||||
Share-based compensation | |||||
Total compensation expense | 329,000 | 2,262,000 | 9,630,000 | 72,483,000 | |
General and administrative expenses | RSUs | Non-employees | |||||
Share-based compensation | |||||
Total fair value of restricted shares vested | $ 194,000 | 1,320,000 | |||
Research and development expenses | |||||
Share-based compensation | |||||
Total compensation expense | $ 163,000 | ¥ 1,124,000 | ¥ 562,000 | ¥ 3,828,000 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | |
Movement in accumulated other comprehensive income | ||||
Balance at beginning of year | ¥ (500,907) | ¥ (142,521) | ¥ 721,686 | |
Amounts reclassified from accumulated other comprehensive income | 3,290 | (3,552) | ||
Balance at end of year | $ (78,537) | (539,978) | (500,907) | (142,521) |
Foreign currency translation | ||||
Movement in accumulated other comprehensive income | ||||
Balance at beginning of year | 2,559 | (189) | ||
Other comprehensive (loss)/income before reclassification | (1,037) | 2,748 | ||
Amounts reclassified from accumulated other comprehensive income | 0 | |||
Balance at end of year | 221 | 1,522 | 2,559 | (189) |
Unrealized holding gain on available-for-sale investments | ||||
Movement in accumulated other comprehensive income | ||||
Balance at beginning of year | 905 | |||
Other comprehensive (loss)/income before reclassification | (4,195) | |||
Amounts reclassified from accumulated other comprehensive income | 0 | 3,290 | ||
Balance at end of year | 905 | |||
Accumulated other comprehensive income | ||||
Movement in accumulated other comprehensive income | ||||
Balance at beginning of year | 2,559 | 716 | 3,902 | |
Other comprehensive (loss)/income before reclassification | (1,037) | (1,447) | ||
Amounts reclassified from accumulated other comprehensive income | 0 | 3,290 | (3,552) | |
Balance at end of year | $ 221 | ¥ 1,522 | ¥ 2,559 | ¥ 716 |
MAINLAND CHINA EMPLOYEE CONTR_2
MAINLAND CHINA EMPLOYEE CONTRIBUTION PLAN (Details) | 12 Months Ended | |||
Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | |
MAINLAND CHINA EMPLOYEE CONTRIBUTION PLAN | ||||
Total expenses for the plan | $ 4,260,000 | ¥ 29,288,000 | ¥ 44,416,000 | ¥ 53,669,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) ¥ in Thousands, $ in Thousands, $ in Millions | 12 Months Ended | ||||
Dec. 31, 2018HKD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | |
Loss before income tax expense | |||||
Non-PRC | $ 3,128 | ¥ 21,495 | ¥ (36,317) | ¥ (128,184) | |
PRC | (6,880) | (47,297) | (275,201) | (781,840) | |
Loss before income taxes | (3,752) | (25,802) | (311,518) | (910,024) | |
Income tax expense (benefit) | |||||
Current | 2 | 11 | 29,428 | 1,104 | |
Deferred | 0 | 0 | 30,220 | 3,125 | |
Income tax expense (benefit) | $ 2 | ¥ 11 | ¥ 59,648 | ¥ 4,229 | |
HK | |||||
Income taxes | |||||
Foreign statutory corporate income tax rate (as a percent) | 16.50% | 16.50% | 16.50% | ||
Amount of assessable profits under lowered tax rate | $ 2 | ||||
Percentage of lowered income tax rate | 8.25% | 8.25% | 8.25% | ||
PRC | |||||
Income taxes | |||||
Statutory tax rate (as a percent) | 25.00% | 25.00% | 25.00% | ||
HNTE | PRC | |||||
Income taxes | |||||
Preferential tax rate (as a percent) | 15.00% | 15.00% | 15.00% | ||
Tax Year 2016 to 2021 [Member] | HNTE | PRC | |||||
Income taxes | |||||
Preferential tax rate (as a percent) | 15.00% | 15.00% | 15.00% | ||
Tax Year 2016 to 2020 [Member] | HNTE | PRC | |||||
Income taxes | |||||
Preferential tax rate (as a percent) | 15.00% | 15.00% | 15.00% | ||
ChinaCache North America, Inc. | Maximum | United States of America | |||||
Income taxes | |||||
Foreign statutory corporate income tax rate (as a percent) | 21.00% | 21.00% | 21.00% | 34.00% | 34.00% |
ChinaCache North America, Inc. | Maximum | California | |||||
Income taxes | |||||
State Income Tax (as a percent) | 8.84% | 8.84% | 8.84% | 8.84% | 8.84% |
ChinaCache Networks Hong Kong Ltd. ("ChinaCache HK") | HK | |||||
Income taxes | |||||
Foreign statutory corporate income tax rate (as a percent) | 8.25% | 8.25% | 8.25% | 16.50% | 16.50% |
INCOME TAXES - TAX RECONCILIATI
INCOME TAXES - TAX RECONCILIATION (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | |
Reconciliation of tax computed by applying statutory income tax rate to the income tax expense | ||||
Loss before income tax expense | $ (3,752) | ¥ (25,802) | ¥ (311,518) | ¥ (910,024) |
Income tax computed at PRC statutory tax rate of 25% | (938) | (6,450) | (77,881) | (227,506) |
Preferential tax rates | (1,023) | (7,031) | 15,955 | 68,685 |
International rate differences | (688) | (4,732) | 9,401 | 22,365 |
Additional 50% tax deduction for qualified research and development expenses | (1,051) | (7,228) | (8,795) | (9,915) |
Non-deductible expenses | 437 | 3,002 | 6,187 | 2,043 |
Effect of changes in tax rates on deferred taxes | 14,763 | 101,502 | (33,930) | (61,978) |
Changes in the valuation allowance | (11,498) | (79,052) | 148,711 | 210,535 |
Income tax expense (benefit) | $ 2 | ¥ 11 | ¥ 59,648 | ¥ 4,229 |
INCOME TAXES - COMPONENTS OF DE
INCOME TAXES - COMPONENTS OF DEFERRED TAX ASSETS AND LIABILITIES (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | |
Deferred Tax Assets, Net of Valuation Allowance [Abstract] | ||||
- Allowance for doubtful accounts | ¥ 19,553,000 | $ 1,792 | ¥ 12,323,000 | |
- Deferred revenue | 4,895,000 | 350 | 2,407,000 | |
- Accruals | 25,256,000 | 3,781 | 25,993,000 | |
- Tax losses | 159,782,000 | 19,613 | 134,855,000 | |
- Property and equipment | 3,424,000 | 306 | 2,105,000 | |
- Intangible assets | 2,001,000 | 214 | 1,469,000 | |
- Long-term investment impairment | 1,500,000 | 140 | 960,000 | |
- Impairment loss for long lived assets | 68,508,000 | 3,587 | 24,663,000 | |
- Unrealized profit | 71,760,000 | 10,453 | 71,868,000 | |
Less: valuation allowance | (356,679,000) | (40,236) | (276,643,000) | |
Total Deferred tax assets | ||||
Change in the valuation allowance | ¥ 79,052,000 | ¥ 148,711,000 |
INCOME TAXES - OPERATING LOSS C
INCOME TAXES - OPERATING LOSS CARRYFORWARDS (Details) | Dec. 31, 2018CNY (¥) |
PRC Subsidiaries | |
Income taxes | |
Net tax operating losses | ¥ 804,755,000 |
Non PRC | |
Income taxes | |
Net tax operating losses | ¥ 17,663,000 |
INCOME TAXES - UNRECOGNIZED TAX
INCOME TAXES - UNRECOGNIZED TAX EXPENSE (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | |
Roll-forward of accrued unrecognized tax expense | ||||
Balance-beginning | $ (1,203) | ¥ (8,273,000) | ¥ (8,273,000) | |
Increase based on tax positions related to the current year | 0 | 0 | 0 | |
Balance-ending | $ (1,203) | (8,273,000) | (8,273,000) | ¥ (8,273,000) |
Unrecognized tax expense | ¥ 0 | 0 | ||
Period in which the amount of unrecognized tax expense will change | 12 months | 12 months | ||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense | ¥ 1,510,000 | 1,510,000 | ¥ 1,510,000 | |
Payment of interest and penalties accrued | ¥ 13,731,000 | ¥ 12,221,000 | ||
PRC Subsidiaries | ||||
Roll-forward of accrued unrecognized tax expense | ||||
Period to assess underpaid tax plus penalties and interest | 5 years | 5 years |
RELATED PARTY BALANCES AND TR_3
RELATED PARTY BALANCES AND TRANSACTIONS - RELATIONSHIP WITH THE COMPANY (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Mr. Wang Song | |
Related party balances and transactions | |
Relationship with the Company | The Co-Founder and Ex-director of the Company |
Ms. Kou Xiaohong | |
Related party balances and transactions | |
Relationship with the Company | The Co-Founder and Ex-director of the Company |
RELATED PARTY BALANCES AND TR_4
RELATED PARTY BALANCES AND TRANSACTIONS - GUARANTEE PROVIDED BY RELATED PARTIES TO GROUP (Details) - CNY (¥) ¥ in Thousands | 1 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2018 | |
Mr. Wang Song | Short-term borrowing | Third-party A | ||
Guarantee provided by related parties to the Group | ||
Guarantee provided | ¥ 12,350 | |
Mr. Wang Song | Capital lease | Vendor A | ||
Guarantee provided by related parties to the Group | ||
Guarantee provided | 39,000 | |
Wang Song and Kou Xiahong | Capital lease | Vendor B | ||
Guarantee provided by related parties to the Group | ||
Guarantee provided | ¥ 25,000 | |
Tianjin Shuishan | ||
Guarantee provided by related parties to the Group | ||
Percentage of equity interest purchased | 47.70% | |
Proceeds from issuance of equity share | ¥ 133,500 | |
Shanghai Qiaoyong | ||
Guarantee provided by related parties to the Group | ||
Percentage of equity interest purchased | 26.30% | |
Proceeds from issuance of equity share | ¥ 73,700 | |
Tianjin Dingsheng [Member] | ||
Guarantee provided by related parties to the Group | ||
Percentage of equity interest purchased | 5.00% | |
Proceeds from issuance of equity share | ¥ 14,000 |
RELATED PARTY BALANCES AND TR_5
RELATED PARTY BALANCES AND TRANSACTIONS - DUE FROM RELATED PARTY (Details) - 12 months ended Dec. 31, 2018 ¥ in Thousands, $ in Thousands | USD ($) | CNY (¥) |
Changes in related party balances | ||
Balance at the beginning of the period | ¥ (18) | |
Expense paid on behalf of the Group | (328) | |
Expense Reimbursement payment | 277 | |
Balance at the end of the period | $ (10) | (69) |
Mr. Wang Song | ||
Changes in related party balances | ||
Expense paid on behalf of the Group | (328) | |
Expense Reimbursement payment | 277 | |
Balance at the end of the period | (7) | (51) |
Ms. Kou Xiaohong | ||
Changes in related party balances | ||
Balance at the beginning of the period | (18) | |
Balance at the end of the period | $ (3) | ¥ (18) |
RESTRICTED NET ASSETS (Details)
RESTRICTED NET ASSETS (Details) | 12 Months Ended | |||
Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2018CNY (¥) | |
RESTRICTED NET ASSETS | ||||
Minimum percentage of after tax profits to be allocated to general reserve fund | 10.00% | 10.00% | ||
Maximum threshold, expressed as a percentage of an entity's general reserve fund to its registered capital, for which allocations of after-tax profits to the general reserve fund are required | 50.00% | 50.00% | ||
Amount appropriated to the statutory reserve funds | $ 193,000 | ¥ 1,326,000 | ¥ 1,326,000 | |
Amount appropriated to the statutory reserve funds | 193,000 | ¥ 1,326,000 | ¥ 1,326,000 | |
Restricted net assets of the Company's PRC subsidiaries and VIEs | $ 68,535,000 | ¥ 471,213,000 |
LOSS PER SHARE (Details)
LOSS PER SHARE (Details) ¥ / shares in Units, $ / shares in Units, ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2018CNY (¥)¥ / sharesshares | Dec. 31, 2017CNY (¥)¥ / sharesshares | Dec. 31, 2016CNY (¥)¥ / sharesshares | |
Numerator: | ||||
Net loss attributable to ordinary shareholders: | $ (3,551) | ¥ (24,418) | ¥ (369,161) | ¥ (913,477) |
Denominator: | ||||
Number of shares outstanding, opening | 425,150,082 | 425,150,082 | 421,522,374 | 400,165,607 |
Weighted average number of shares issued | 1,659,485 | 1,659,485 | 4,067,372 | 20,702,130 |
Weighted average number of shares repurchased | (12,678,015) | |||
Weighted-average number of shares outstanding - Basic and diluted | 426,809,567 | 426,809,567 | 425,589,746 | 408,189,722 |
Loss per share | ||||
Basic and Diluted (in CNY or dollars per share) | (per share) | $ (0.01) | ¥ (0.06) | ¥ (0.87) | ¥ (2.24) |
Options exercised (in shares) | 1,096,896 | 1,096,896 | 1,325,241 | |
Restricted shares vested (in shares) | 2,040,736 | 2,040,736 | 3,627,709 | 33,762,181 |
Ordinary shares | ||||
Loss per share | ||||
Share re issued to depository bank (in shares) | 0 | 0 | 0 | 23,000,000 |
FAIR VALUE MEASUREMENT (Details
FAIR VALUE MEASUREMENT (Details) - Investee D - Level 3 - Recurring basis ¥ in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
Reconciliation of all assets measured at fair value on a recurring basis using significant unobservable inputs | |||
Fair value at beginning of the year | ¥ 0 | ¥ 3,973 | |
Other than temporary impairment | (3,973) | (3,973) | |
Fair value at end of the year | $ 0 | ¥ 0 | ¥ 0 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) | 12 Months Ended | ||||
Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2018CNY (¥) | |
COMMITMENTS AND CONTINGENCIES | |||||
Total rental expense under all operating leases | $ 2,472,000 | ¥ 16,997,000 | ¥ 23,401,000 | ¥ 22,846,000 | |
Future minimum lease payments under non-cancelable operating leases in relation to office premises | |||||
2019 | 1,905,000 | ¥ 13,099,000 | |||
2020 | 870,000 | 5,982,000 | |||
2021 | 157,000 | 1,082,000 | |||
2022 | 162,000 | 1,114,000 | |||
2023 | 167,000 | 1,147,000 | |||
2024 | 274,000 | 1,886,000 | |||
Total | 3,535,000 | 24,310,000 | |||
Purchase Commitments | |||||
Outstanding purchase commitments in relation to bandwidth and cloud infrastructure | $ 48,983,000 | ¥ 336,783,000 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Contingencies (Details) ¥ in Millions | 1 Months Ended | ||||||
Aug. 31, 2019CNY (¥) | Jun. 30, 2019CNY (¥) | Oct. 31, 2017CNY (¥) | Sep. 30, 2017USD ($) | Sep. 30, 2017CNY (¥) | Aug. 31, 2017USD ($) | Aug. 31, 2017CNY (¥) | |
SUBSEQUENT EVENTS | |||||||
Approximate amount of compensation or damages payable | ¥ 50.5 | ||||||
BFSMC | |||||||
SUBSEQUENT EVENTS | |||||||
Amount of sought payment | $ 8,860,000 | ¥ 14.4 | |||||
Xin Run | |||||||
SUBSEQUENT EVENTS | |||||||
Bank Deposits and Other Assets | ¥ 50.5 | ||||||
Xin Run | BFSMC | Data center sale case | |||||||
SUBSEQUENT EVENTS | |||||||
Amount of sought payment | $ 96 | ¥ 105.6 | |||||
Subsequent event | Xin Run | |||||||
SUBSEQUENT EVENTS | |||||||
Amount of sought payment | ¥ 35.6 | ||||||
Subsequent event | Xin Run | BFSMC | |||||||
SUBSEQUENT EVENTS | |||||||
Amount of sought payment | ¥ 64.8 | ¥ 64.8 |
SUBSEQUENT EVENT (Details)
SUBSEQUENT EVENT (Details) | Apr. 03, 2019CNY (¥) | Oct. 31, 2019CNY (¥) | Aug. 31, 2019CNY (¥) | Jun. 30, 2019CNY (¥) | Apr. 30, 2019CNY (¥) | Dec. 31, 2017CNY (¥) | Oct. 31, 2017CNY (¥) | Sep. 30, 2017USD ($) | Sep. 30, 2017CNY (¥) | Aug. 31, 2017USD ($) | Aug. 31, 2017CNY (¥) | Jul. 31, 2017CNY (¥) | Dec. 31, 2018CNY (¥) | Jan. 30, 2018USD ($) | Jan. 30, 2018CNY (¥) | Dec. 13, 2017CNY (¥) | Nov. 07, 2017CNY (¥) | Oct. 30, 2017CNY (¥) |
SUBSEQUENT EVENTS | ||||||||||||||||||
Non-payment of construction fee | ¥ 73,900,000 | |||||||||||||||||
Bank of Fushun [Member] | Three-year credit facility | ||||||||||||||||||
SUBSEQUENT EVENTS | ||||||||||||||||||
Long-term Line of Credit | $ 3,927,000 | ¥ 27,000,000 | ¥ 23,000,000 | ¥ 150,000,000 | ¥ 150,000,000 | |||||||||||||
BFSMC | ||||||||||||||||||
SUBSEQUENT EVENTS | ||||||||||||||||||
Damages sought value | $ 8,860,000 | ¥ 14,400,000 | ||||||||||||||||
Xin Run | ||||||||||||||||||
SUBSEQUENT EVENTS | ||||||||||||||||||
Service fee payable | ¥ 18,700,000 | |||||||||||||||||
Related penalty sought value | ¥ 37,200,000 | |||||||||||||||||
Xin Run | Shenyang Rural Commercial Bank [Member] | ||||||||||||||||||
SUBSEQUENT EVENTS | ||||||||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | ¥ 220,000,000 | |||||||||||||||||
Debt Instrument, Term | 5 years | |||||||||||||||||
Xin Run | BFSMC | Data center sale case | ||||||||||||||||||
SUBSEQUENT EVENTS | ||||||||||||||||||
Damages sought value | $ 96 | ¥ 105,600,000 | ||||||||||||||||
Beijing Blue IT | ||||||||||||||||||
SUBSEQUENT EVENTS | ||||||||||||||||||
Amount currently frozen and restricted to be used | ¥ 12,000,000 | |||||||||||||||||
Subsequent event | Beijing Urban Construction | ||||||||||||||||||
SUBSEQUENT EVENTS | ||||||||||||||||||
Litigation Settlement, Amount Awarded from Other Party | ¥ 33,700,000 | |||||||||||||||||
Payments for Legal Settlements | ¥ 10,000,000 | |||||||||||||||||
Subsequent event | BFSMC | ||||||||||||||||||
SUBSEQUENT EVENTS | ||||||||||||||||||
Litigation Settlement, Amount Awarded from Other Party | ¥ 64,800,000 | |||||||||||||||||
Subsequent event | Xin Run | ||||||||||||||||||
SUBSEQUENT EVENTS | ||||||||||||||||||
Damages sought value | ¥ 35,600,000 | |||||||||||||||||
Payment of equipment purchase fee and related interest | 40,800,000 | |||||||||||||||||
Payment of construction service fee and related interest | 58,100,000 | |||||||||||||||||
Subsequent event | Xin Run | Shenyang Rural Commercial Bank [Member] | ||||||||||||||||||
SUBSEQUENT EVENTS | ||||||||||||||||||
Long-term Line of Credit | ¥ 160,000,000 | |||||||||||||||||
Subsequent event | Xin Run | Early payment of bank loan | Shenyang Rural Commercial Bank [Member] | ||||||||||||||||||
SUBSEQUENT EVENTS | ||||||||||||||||||
Long-term Line of Credit | 160,000,000 | |||||||||||||||||
Subsequent event | Xin Run | Early payment of bank loan | Bank of Fushun [Member] | ||||||||||||||||||
SUBSEQUENT EVENTS | ||||||||||||||||||
Long-term Line of Credit | 170,000,000 | |||||||||||||||||
Subsequent event | Xin Run | Trading company | ||||||||||||||||||
SUBSEQUENT EVENTS | ||||||||||||||||||
Litigation Settlement, Amount Awarded from Other Party | 2,000,000 | |||||||||||||||||
Damages sought value | 20,200,000 | |||||||||||||||||
Related penalty sought value | 6,000,000 | |||||||||||||||||
Subsequent event | Xin Run | Technology company | ||||||||||||||||||
SUBSEQUENT EVENTS | ||||||||||||||||||
Extra construction fee charged | 16,500,000 | |||||||||||||||||
Damages sought value | ¥ 20,500,000 | |||||||||||||||||
Subsequent event | Xin Run | BFSMC | ||||||||||||||||||
SUBSEQUENT EVENTS | ||||||||||||||||||
Damages sought value | ¥ 64,800,000 | ¥ 64,800,000 | ||||||||||||||||
Subsequent event | Beijing Blue IT | Technology company | ||||||||||||||||||
SUBSEQUENT EVENTS | ||||||||||||||||||
Damages sought value | ¥ 28,300,000 | |||||||||||||||||
Subsequent event | Beijing Shuoge's | ||||||||||||||||||
SUBSEQUENT EVENTS | ||||||||||||||||||
Business Combination, Consideration Transferred | ¥ 251,800,000 | |||||||||||||||||
Consideration returned | 73,200,000 | |||||||||||||||||
Interest from January 1, 2019 to Dec 31, 2024 | 13,000,000 | |||||||||||||||||
Rent-Back Operation Right Cost, Maximum | ¥ 173,100,000 |
CONDENSED FINANCIAL INFORMATI_3
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY - BALANCE SHEETS (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) |
Current assets: | ||||||
Cash and cash equivalents | $ 5,982 | ¥ 41,127 | ¥ 106,708 | |||
Prepaid expenses and other current assets | 24,672 | 169,635 | 212,984 | |||
Total current assets | 147,006 | 1,010,747 | 1,064,491 | |||
Non-current assets: | ||||||
Long term investments | 4,385 | 30,148 | 30,148 | |||
Total non-current assets | 121,463 | 835,122 | 541,544 | |||
TOTAL ASSETS | 268,469 | 1,845,869 | 1,606,035 | |||
Current liabilities: | ||||||
Accrued expenses and other payables | 6,927 | 47,634 | 39,282 | |||
Total current liabilities | 293,152 | 2,015,567 | 1,887,363 | |||
Total liabilities | 347,006 | 2,385,847 | 2,106,942 | |||
Shareholders' deficit: | ||||||
Ordinary shares (US$0.0001 par value; 1,000,000,000 and 1,000,000,000 shares authorized; 426,267,345 and 429,404,977 shares issued and outstanding as of December 31, 2017 and 2018, respectively) | 49 | 338 | 338 | |||
Additional paid-in capital | 229,678 | 1,579,153 | 1,573,341 | |||
Treasury stock | 2,623 | 18,033 | ||||
Statutory reserves | 193 | 1,326 | 1,326 | |||
Accumulated deficit | (305,515) | (2,100,569) | (2,076,151) | |||
Accumulated other comprehensive income | 221 | 1,522 | 2,559 | |||
Total shareholder's deficit | (78,537) | (539,978) | (500,907) | ¥ (142,521) | ¥ 721,686 | |
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT | 268,469 | 1,845,869 | 1,606,035 | |||
Parent | ||||||
Current assets: | ||||||
Cash and cash equivalents | 1,230 | 8,455 | $ 166 | 1,141 | ¥ 24,463 | ¥ 46,363 |
Prepaid expenses and other current assets | 332 | 2,283 | 1,647 | |||
Total current assets | 1,562 | 10,738 | 2,788 | |||
Non-current assets: | ||||||
Long term investments | 2,915 | 20,045 | 20,045 | |||
Investments in subsidiaries and consolidated VIEs | (82,257) | (565,557) | (514,022) | |||
Total non-current assets | (79,342) | (545,512) | (493,977) | |||
TOTAL ASSETS | (77,780) | (534,774) | (491,189) | |||
Current liabilities: | ||||||
Accrued expenses and other payables | 217 | 1,489 | 7,398 | |||
Total current liabilities | 217 | 1,489 | 7,398 | |||
Total liabilities | 217 | 1,489 | 7,398 | |||
Shareholders' deficit: | ||||||
Ordinary shares (US$0.0001 par value; 1,000,000,000 and 1,000,000,000 shares authorized; 426,267,345 and 429,404,977 shares issued and outstanding as of December 31, 2017 and 2018, respectively) | 49 | 338 | 338 | |||
Additional paid-in capital | 229,678 | 1,579,153 | 1,573,341 | |||
Treasury stock | (2,623) | (18,033) | ||||
Statutory reserves | 193 | 1,326 | 1,326 | |||
Accumulated deficit | (305,515) | (2,100,569) | (2,076,151) | |||
Accumulated other comprehensive income | 221 | 1,522 | 2,559 | |||
Total shareholder's deficit | (77,997) | (536,263) | (498,587) | |||
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT | $ (77,780) | ¥ (534,774) | ¥ (491,189) |
CONDENSED FINANCIAL INFORMATI_4
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY - BALANCE SHEETS (Parenthetical) (Details) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
CONDENSED BALANCE SHEETS | ||
Ordinary shares, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Ordinary shares, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Ordinary shares, shares issued (in shares) | 429,404,977 | 426,267,345 |
Ordinary shares, shares outstanding (in shares) | 429,404,977 | 426,267,345 |
Parent | ||
CONDENSED BALANCE SHEETS | ||
Ordinary shares, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Ordinary shares, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Ordinary shares, shares issued (in shares) | 429,404,977 | 426,267,345 |
Ordinary shares, shares outstanding (in shares) | 450,428,825 | 426,267,345 |
CONDENSED FINANCIAL INFORMATI_5
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY - COMPREHENSIVE (LOSS) INCOME (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | |
CONDENSED STATEMENTS OF COMPREHENSIVE LOSS | ||||
General and administrative expenses | $ (18,665) | ¥ (128,331,000) | ¥ (142,721,000) | ¥ (256,007,000) |
Research and development expenses | (9,950) | (68,412,000) | (81,748,000) | (104,018,000) |
Impairment of long-term investments | 0 | |||
Operating loss | (748) | (5,144,000) | (277,937,000) | (922,591,000) |
Interest income | 52 | 354,000 | 1,430,000 | 4,669,000 |
Other income | 1,212 | 8,331,000 | (5,303,000) | 5,336,000 |
Foreign exchange gain/(loss) | 611 | 4,200,000 | (11,043,000) | 14,209,000 |
Loss before income taxes | (3,752) | (25,802,000) | (311,518,000) | (910,024,000) |
Income tax expense | (2) | (11,000) | (59,648,000) | (4,229,000) |
Net loss | (3,754) | (25,813,000) | (371,166,000) | (914,253,000) |
Foreign currency translation | (151) | (1,037,000) | 2,748,000 | (293,000) |
Unrealized gain/(loss) from available-for-sale investments | (4,195,000) | 659,000 | ||
Amounts reclassified from accumulated other comprehensive income | 3,290,000 | (3,552,000) | ||
Total other comprehensive (loss)/income, net of tax | (151) | (1,037,000) | 1,843,000 | (3,186,000) |
Comprehensive loss | (3,905) | (26,850,000) | (369,323,000) | (917,439,000) |
Parent | ||||
CONDENSED STATEMENTS OF COMPREHENSIVE LOSS | ||||
General and administrative expenses | (1,244) | (8,551,000) | (10,986,000) | (21,314,000) |
Research and development expenses | 0 | 0 | 0 | 0 |
Impairment of long-term investments | (3,290,000) | (12,240,000) | ||
Operating loss | (1,244) | (8,551,000) | (14,276,000) | (33,554,000) |
Interest income | 1 | 5,000 | 18,000 | |
Other income | 3,151 | 21,662,000 | 14,384,000 | 6,593,000 |
Foreign exchange gain/(loss) | 611 | 4,200,000 | (11,043,000) | 14,209,000 |
Share of losses from subsidiaries and consolidated VIEs | (6,070) | (41,734,000) | (358,226,000) | (900,743,000) |
Loss before income taxes | (3,551) | (24,418,000) | (369,161,000) | (913,477,000) |
Net loss | (3,551) | (24,418,000) | (369,161,000) | (913,477,000) |
Foreign currency translation | (151) | (1,037,000) | 2,748,000 | (293,000) |
Unrealized gain/(loss) from available-for-sale investments | (4,195,000) | 659,000 | ||
Amounts reclassified from accumulated other comprehensive income | 3,290,000 | (3,552,000) | ||
Total other comprehensive (loss)/income, net of tax | (151) | (1,037,000) | 1,843,000 | (3,186,000) |
Comprehensive loss | $ (3,702) | ¥ (25,455,000) | ¥ (367,318,000) | ¥ (916,663,000) |
CONDENSED FINANCIAL INFORMATI_6
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY - CASH FLOWS (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | |
CONDENSED STATEMENTS OF CASH FLOWS | ||||||
Net cash used in operating activities | $ (6,059) | ¥ (41,659) | ¥ (99,039) | ¥ (187,180) | ||
Cash flows from investing activities: | ||||||
Cash paid for long term investments | (362) | (2,242) | ||||
Cash received from sale of short term investment | 80,380 | |||||
Net cash provided by investing activities | (23,389) | (160,811) | (89,295) | (202,390) | ||
Cash flows from financing activities: | ||||||
Proceeds from employee share options exercised | 7,579 | |||||
Payments for repurchases of ordinary shares | (39,402) | |||||
Net cash used in financing activities | 20,449 | 140,596 | 149,007 | (84,645) | ||
Net decrease in cash and cash equivalents | (8,999) | (61,874) | (39,327) | (474,215) | ||
Cash and cash equivalents at beginning of the year | 106,708 | |||||
Effect of foreign exchange rate changes on cash | 255 | 1,754 | (10,584) | 14,617 | ||
Cash and cash equivalents at end of the year | 106,708 | $ 5,982 | ¥ 41,127 | |||
Parent | ||||||
CONDENSED STATEMENTS OF CASH FLOWS | ||||||
Net cash used in operating activities | (604) | (4,151) | (22,514) | (15,395) | ||
Cash flows from investing activities: | ||||||
Cash paid for long term investments | (1,842) | |||||
Cash received from sale of short term investment | 26,828 | |||||
Net cash provided by investing activities | 24,986 | |||||
Cash flows from financing activities: | ||||||
Proceeds from employee share options exercised | 5,427 | |||||
Payments for repurchases of ordinary shares | (39,402) | |||||
Net cash used in financing activities | (33,975) | |||||
Net decrease in cash and cash equivalents | 604 | 4,151 | (22,514) | (24,384) | ||
Cash and cash equivalents at beginning of the year | 166 | 1,141 | 24,463 | 46,363 | ||
Effect of foreign exchange rate changes on cash | 460 | 3,163 | (808) | 2,484 | ||
Cash and cash equivalents at end of the year | $ 166 | ¥ 1,141 | ¥ 24,463 | ¥ 46,363 | $ 1,230 | ¥ 8,455 |